6/10/2012 7:34 PM ET
(RTTNews) – The South Korea stock market on Friday wrote a finish to the modest two-day winning streak in which it had collected almost 65 points or 4 percent. The KOSPI settled just above the 1,835-point plateau, and now traders may be tempted to go hunting for bargains when the market kicks off trade on Monday.
The global forecast for the Asian markets is cautiously optimistic on bargain hunting following heavy damage through much of last week. Positive economic data from China over the weekend adds to the positive sentiment, with better than expected numbers for exports, trade balance, inflation, retail sales and industrial output. In addition word comes from Europe that Spain will accept a bailout of $125 billion for its ailing banking sector, which investors hope will bring stability to the embattled Eurozone.
The KOSPI finished modestly lower on Friday, in line with other regional declines following weakness from the technology stocks and automobile producers.
For the day, the index declined 12.31 points or 0.67 percent to finish at 1,835.64 after trading between 1,832.83 and 1,854.59. Volume was 355 million shares worth 3.39 trillion won. There were 478 decliners and 330 gainers.
Among the decliners, Samsung Electronics shed 1.42 percent, while Hyundai Motor lost 1.46 percent, Kia Motors fell 1.41 percent, LG Chem dropped 0.92 percent, Hyundai Heavy Industries eased 0.19 percent and SK Telecom plunged 3.16 percent.
The lead from Wall Street is firmly positive as stocks showed a significant turnaround over the course of the trading day on Friday after coming under pressure in early trading as traders expressed renewed optimism about the financial situation in Europe.
The early weakness was partly due to waning optimism about the possibility of further stimulus from the Federal Reserve following Fed Chairman Ben Bernanke’s testimony before the Joint Economic Committee on Thursday. While Bernanke said that Fed “remains prepared to take action” if the economic situation worsens, he made no explicit reference to further easing measures.
Disappointing trade data from Germany also contributed to the initial downward move, with the Federal Statistical Office reporting a 4.8 percent drop in imports in April.
The subsequent turnaround by the markets was partly due to optimism about the outcome of a weekend meeting of European financial officials, with rumors correctly suggesting that Spain could be in line for a bailout.
Some traders also likely used the early weakness as an opportunity to pick up stocks at reduced levels, doing some bargain hunting after the recent pullback.