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Recovery Expected For South Korea Stock Market

The South Korea stock market has moved lower in two of three trading days since the end of the three-day winning streak in which it had gathered almost 35 points or 1.7 percent. The KOSPI now rests just above the 1,925-point plateau although it's likely to rebound on Monday.

The global forecast for the Asian markets is upbeat on renewed expectations for fiscal stimulus. The European and U.S. markets were sharply higher and the Asian bourses are tipped to open in similar fashion.

The KOSPI finished modestly lower on Friday following losses from the technology stocks and mixed performances from the financials and automobile producers.

For the day, the index slid 11.20 points or 0.58 percent to finish at 1,927.17 after trading between 1,911.72 and 1,927.70. Volume was 413 million shares worth 4.18 trillion won. There were 644 decliners and 203 gainers.

Among the actives, Shinhan Financial fell 0.62 percent, while KB Financial and SK Hynix both shed 0.65 percent, Hana Financial collected 0.32 percent, Samsung Electronics added 0.46 percent, LG Electronics fell 0.33 percent, LG Display tumbled 1.56 percent, POSCO lost 0.49 percent, SK Telecom plunged 3.14 percent, KEPCO skidded 1.59 percent, Hyundai Motors rose 0.39 percent and Kia Motors eased 0.11 percent.

The lead from Wall Street is broadly positive as stocks opened higher on Friday and the gains accelerated as the day progressed.

The Dow added 306.61 points or 1.20 percent to 25,886.01, while the NASDAQ jumped 129.37 points or 1.67 percent to 7,895.99 and the S&P 500 rose 41.08 points or 1.44 percent to 2,888.68. For the week, the Dow shed 1.5 percent, the NASDAQ lost 0.8 percent and the S&P fell 1 percent.

The rally on Wall Street reflected optimism about the world's central banks providing stimulus in order to prevent a global recession. European Central Bank official Olli Rehn expressed the need for significant easing in September to support the flagging eurozone economy, spurring investors.

The expectations for more stimulus fueled a pullback by U.S. treasuries and a subsequent increase in bond yields. The yield on the benchmark ten-year note had dropped below the two-year yield on Wednesday, sparking fears of an impending recession and a sell-off on Wall Street.

In economic news, the University of Michigan noted a significant deterioration in U.S. consumer sentiment in August. Also, the Commerce Department reported an unexpected slump in housing starts in July but a sharper than expected increase in building permits.

Crude oil futures settled higher Friday as recession fears faded amid hopes global central banks will announce further stimulus to revive economic growth. West Texas Intermediate Crude oil futures for September ended up $0.40 or 0.7 percent at $54.87 a barrel.

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