The South Korea stock market on Monday wrote a finish to the five-day winning streak in which it had climbed more than 75 points or 3.8 percent. The KOSPI settled just above the 1,940-point plateau, and now traders are bracing for further damage when the market opens on Tuesday.
The global forecast for the Asian markets suggests consolidation following continued concerns over the Greek debt problem, although bargain hunting may provide support later in the day. Steel stocks figure to fall under pressure, along with properties and technology shares. The European and U.S. markets finished firmly in the red, and the Asian markets are expected to open in similar fashion.
The KOSPI finished sharply lower on Monday following losses from the technology stocks, steel companies and automobile producers.
For the day, the index dropped 24.28 points or 1.24 percent to finish at 1,940.55 after trading between 1,936.14 and 1,961.60. Volume was 406 million shares worth 6.3 trillion won. There were 531 decliners and 299 gainers.
Among the decliners, Samsung Electronics shed 0.89 percent, while POSCO lost 1.65 percent, Hyundai Steel fell 2.71 percent, Hyundai Motor dropped 2.26 percent, Kia Motors retreated 0.89 percent and Hana Financial was down 1.13 percent.
The lead from Wall Street is modestly negative as stocks showed a substantial recovery on Monday after moving sharply lower in early trading. Stocks still finished in the red amid renewed concerns that the financial situation in Europe could lead to recession and its potential impact on the global economy.
Adding to the worries about Europe, Greek Finance Minister Evangelos Venizelos angrily rejected a German plan for the euro zone to impose a budget overseer on Greece in return for a new 130 billion euro bailout. Venizelos said the proposal would improperly force his country to choose between "financial assistance" and "national dignity." The report came as European leaders held a summit in Brussels regarding a permanent rescue fund for the euro zone.
Traders also reacted negatively to a report from the U.S. Commerce Department showing that personal spending came in nearly unchanged in December despite a notable increase in personal income. Personal income rose by 0.5 percent in December, although personal spending edged down by less than 0.1 percent. The savings rate reached a four-month high of 4.0 percent.
Selling pressure waned not long after the open, however, and stocks subsequently climbed well off their worst levels of the day. The rebound reflected the recent upward trend for the markets.
Among individual stocks, shares of Gannett (GCI) came under pressure on the day after the newspaper publisher reported a notable drop in advertising revenue at its newspaper division. Meanwhile, Thomas & Betts (TNB) moved sharply higher after the electrical components maker agreed to be acquired by Swiss engineering giant ABB Ltd. (ABB) for $3.9 billion in cash.
The major averages climbed well off their worst levels of the day but finished the day modestly below the unchanged line. The Dow edged down 6.74 points or 0.1 percent to finish at 12,653.72, while the NASDAQ slipped 4.61 points or 0.2 percent to 2,811.94 and the S&P 500 dropped 3.31 points or 0.3 percent to 1,313.02.
In economic news, industrial output in South Korea climbed 2.8 percent on year in December, Statistics Korea said on Tuesday - well shy of forecasts for an increase of 4.1 percent following the 5.6 percent gain in November. On a monthly basis, output contracted a seasonally adjusted 0.9 percent - again missing expectations for a 0.3 percent decline following the 0.4 percent fall in the previous month.
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