South Korea Shares Tipped To Open Under Pressure

Back from the Lunar New Year break, the South Korea stock market has now moved higher in two straight sessions, advancing more than 90 points or 3.5 percent along the way. The KOSPI now rests just beneath the 2,705-point plateau although it’s likely to see profit-taking on Friday.

The global forecast for the Asian markets is soft with profit taking expected, especially among technology stocks. The European and U.S. markets were down and the Asian markets figure to open in similar fashion.

The KOSPI finished sharply higher on Thursday following gains from the technology stocks, chemical companies and industrials, while the financials came in mixed.

For the day, the index jumped 44.48 points or 1.67 percent to finish at 2,707.82 after trading between 2,702.78 and 2,735.34. Volume was 429 million shares worth 12.3 trillion won. There were 811 gainers and 90 decliners.

Among the actives, Shinhan Financial collected 1.18 percent, while KB Financial eased 0.17 percent, Hana Financial fell 0.33 percent, LG Electronics retreated 1.18 percent, SK Hynix rallied 2.90 percent, Naver spiked 3.39 percent, LG Chem surged 5.95 percent, Lotte Chemical advanced 1.54 percent, SK Innovation climbed 1.16 percent, POSCO perked 1.13 percent, Korea Shipbuilding strengthened 1.25 percent, SK Telecom dipped 0.18 percent, KEPCO jumped 2.43 percent, Hyundai Motor accelerated 1.06 percent, Kia Motors lost 0.61 percent and S-Oil, Samsung Electronics and Samsung SDI were unchanged.

The lead from Wall Street is broadly negative as the major averages opened sharply lower on Thursday and stayed that way throughout the session, ending a four-day winning streak.

The Dow plunged 518.17 points or 1.45 percent to finish at 35,111.16, while the NASDAQ plummeted 538.73 points or 3.74 percent to end at 13,878.82 and the S&P tumbled 111.94 points or 2.44 percent to close at 4,477.44.

A steep drop by Meta (FB) weighed on the tech sector, with the Facebook parent plunging nearly 27 percent, and hitting its lowest intraday level in well over a year after reporting weaker than expected Q4 earnings and disappointing revenue guidance for the current quarter.

Several other social media stocks, including Snap and Twitter, tumbled as well. Weak earnings updates from other companies like Honeywell (down more than 7 percent) and Spotify (down nearly 17 percent) also weighed on sentiment.

In economic news, the Labor Department noted a modest decrease by first-time claims for U.S. unemployment benefits last week. Also, the Institute for Supply Management noted a continued slowdown in the pace of growth in U.S. service sector activity in January.

Crude oil prices surged on Thursday as concerns about possible supply disruptions outweighed OPEC’s decision to increase crude output in March. Geopolitical concerns in Eastern Europe and the Middle East have raised concerns about supplies. West Texas Intermediate Crude oil futures for March ended higher by $2.01 or 2.3 percent at a seven-year high $90.27 a barrel.

Closer to home, South Korea will on Friday release January figures for consumer prices. Overall inflation is tipped to increase 0.4 percent on month and 3.3 percent on year after rising 0.2 percent on month and 3.7 percent on year in December.