South Korea Stock Market May Extend Tuesday’s Gains

The South Korea stock market has moved higher – barely – in two of three trading days since the end of the two-day slide in which it had tumbled almost 70 points or 2.3 percent. The KOSPI now rests just above the 2,925-point plateau and the gains may accelerate on Wednesday.

The global forecast for the Asian markets is positive, with support expected from the oil and technology stocks. The European and U.S. markets were up and the Asian markets are tipped to open in similar fashion.

The KOSPI finished barely higher on Tuesday following gains from the financials, technology stocks and automobile producers – while the oil companies were soft and the chemicals were mixed.

For the day, the index rose 0.66 points or 0.02 percent to finish at 2,927.38 after trading between 2,909.82 and 2,943.57. Volume was 559 million shares worth 10.5 trillion won. There were 717 decliners and 170 gainers.

Among the actives, Shinhan Financial collected 1.17 percent, while KB Financial soared 3.81 percent, Hana Financial accelerated 2.86 percent, Samsung Electronics climbed 1.15 percent, LG Electronics gained 0.38 percent, SK Hynix rallied 2.81 percent, LG Chem spiked 3.38 percent, Lotte Chemical plummeted 4.35 percent, S-Oil tanked 2.48 percent, SK Innovation tumbled 1.83 percent, POSCO retreated 1.32 percent, SK Telecom shed 0.53 percent, Hyundai Motor added 0.48 percent, Kia Motors rose 0.36 percent and KEPCO and Naver were unchanged.

The lead from Wall Street is firm as the major averages opened lower on Tuesday and were directionless through the morning but accelerated into the green in the afternoon, finishing near daily highs.

The Dow jumped 183.15 points or 0.51 percent to finish at 36,252.02, while the NASDAQ surged 210.62 points or 1.41 percent to end at 15,153.82 and the S&P 500 gained 42.78 points or 0.92 percent to close at 4,713.07.

The turnaround on Wall Street came after Federal Reserve Chair Jerome Powell testified before a Senate Banking Committee hearing on his nomination for another term. Powell highlighted elevated inflation as a result of supply chain issues and said the Fed would use all of its tools to prevent higher inflation from becoming entrenched.

While Powell’s remarks have been described as hawkish, they are not seen as indicating the Fed will be more aggressive than already suggested by the minutes of the central bank’s latest meeting.

Treasury yields moved to the downside in reaction to Powell’s testimony, with the benchmark ten-year yield continuing to give ground after reaching its highest intraday level since January 2020 on Monday.

Crude oil prices moved sharply higher Tuesday, lifting the most active crude futures contract to the highest settlement in about two months. Hopes that the spread of the Omicron variant will not derail the global economy and adversely impact energy demand supported oil prices. West Texas Intermediate crude oil futures for February spiked $2.99 or 3.8 percent at $81.22 a barrel.