The South Korea stock market has closed higher now in two straight sessions, collecting more than 45 points or 2.5 percent in the process. The KOSPI finished just shy of the 1,830-point plateau, and now analysts are suggesting a mild retreat at the opening of trade on Wednesday.
The global forecast for the Asian markets is mixed following the technical rebound experienced by many of the regional bourses in the previous session. Fitch cut Japan's long-term foreign and local currency issuer default ratings to A+ from AA and AA-, respectively. Another potential pitfall is Greek Prime Minister Lucas Papademos, who said preparations are being made for Greek exit from euro. The European markets finished higher and the U.S. bourses were mixed but little changed, and the Asian markets are tipped to follow the latter lead.
The KOSPI finished sharply higher on Tuesday following gains from the technology stocks and industrial issues.
For the day, the index spiked 29.56 points or 1.64 percent to finish at 1,828.69 after trading between 1,813.53 and 1,831.06. Volume was 416 million shares worth 4.79 trillion won. There were 664 gainers and 194 decliners.
Among the gainers, Samsung Electronics climbed 2.56 percent, while SK Hynix added 0.64 percent, LG Electronics soared 7.63 percent, LG Chem collected 0.89 percent, SK Innovation jumped 1.42 percent and Hyundai Heavy Industries collected 2.94 percent.
The lead from Wall Street offers little guidance as stocks plummeted in the latter part of the Tuesday's trade after seeing a positive bias throughout much of the session. Buying interest re-emerged in the final minutes of trading, however, and the markets ended roughly flat.
The early strength followed a report from the National Association of Realtors showing that existing home sales rose 3.4 percent to an annual rate of 4.62 million in April from a downwardly revised 4.47 million in March. Sales came in below economist estimates, but showed the second consecutive month of annual home price growth.
Bargain hunting also contributed to the upward move, although buying interest remained subdued amid news that Fitch Ratings lowered Japan's credit rating. Fitch cut Japan's long-term foreign and local currency issuer default ratings to A+ from AA and AA-, respectively, citing growing risks for Japan's sovereign credit profile as a result of rising public debt ratios.
Traders also kept a close eye on news out of Europe, and the late-day pullback was attributed to remarks by former Greek Prime Minister Lucas Papademos, who said preparations are being made for Greek exit from euro.
Among individual stocks, shares of Best Buy (BBY) rose by 1.6 percent after the consumer electronics retailer reported better than expected first quarter results. Williams-Sonoma (WSM) also gained after the home goods retailer reported first quarter results that beat estimates. On the other hand, shares of Facebook (FB) fell by 8.9 percent, extending the steep drop seen in the previous session.
While the NASDAQ remained stuck in the red, the Dow and the S&P 500 closed nearly unchanged. The NASDAQ dipped 8.13 points or 0.3 percent to finish at 2,839.08, while the Dow edged down 1.67 points or less than a tenth of a percent to 12,502.81 and the S&P 500 crept up 0.64 points or 0.1 percent to 1,316.63.
On the economic front, South Korea's external debt grew by $13 billion to record $411.4 billion in the first quarter as foreign investors purchased local bonds, the Bank of Korea said on Tuesday. Short-term external debt rose $0.2 billion and long-term debt climbed $12.8 billion. At the same time, the ratio of short term external debt to foreign exchange reserves fell to 43.1 percent from 44.4 percent in the previous quarter.
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