FX.co ★ Continued Consolidation Called For South Korea Shares

The South Korean stock market has seen a volatile trend in recent days, marked by fluctuating daily finishes. Ending a four-day losing phase that saw it plunge nearly 125 points or 4.6 percent, KOSPI, the stock index, is now hovering just below the 2,630-point mark and is poised for potentially more losses on Friday.

This current outlook for Asian markets is unstable due to global concerns about future interest rates. While Europe displayed a mixed market performance, the US markets took a downturn and Asian markets are expected to follow suit.

On Thursday, KOSPI experienced a significant drop, largely driven by losses in the technology and chemicals sectors. Financial sector's mild gains and mixed performance from automobile manufacturers offered little cushion. The index plummeted 47.13 points or 1.76 percent, ending at the day's low of 2,628.62 after a peak of 2,656.51.

Companies showing activity included Shinhan Financial which rose by 0.46 percent and KB Financial which collected 0.58 percent. On the negative side, Samsung Electronics fell 2.93 percent, Samsung SDI retreated 2.01 percent, and LG Electronics dropped 1.74 percent, among others.

Reflecting a global trend, Wall Street showed negative leads as major market indicators displayed a downward trend. The Dow fell by 375.12 points or 0.98 percent, NASDAQ dropped 100.99 points or 0.64 percent, and S&P 500 sank 23.21 points or 0.46 percent.

This market downturn was influenced by an unfavorable response to earnings reports from Meta Platforms and tech titan IBM Corp. Adding fuel to the fire, the US Commerce Department reported weaker than expected economic growth for the first quarter of 2024 and higher than anticipated climbs in the personal consumption expenditures price index. These economic outcomes negatively impacted investor sentiment as they weakened the chances of the Federal Reserve implementing an interest rate cut in the short term.

However, crude oil futures showed recovery from recent losses on Thursday, defying data of slower than expected US GDP growth in the first quarter. West Texas Intermediate Crude oil futures for June ended up $0.76 or approximately 0.92% at $83.57 a barrel.