Continued Consolidation Expected For South Korea Bourse

(RTTNews) - The South Korea stock market has finished lower in four straight sessions, plummeting more than 230 points or 7.6 percent along the way. The KOSPI now sits just above the 2,975-point plateau and it's likely to open under pressure again on Monday.

The global forecast for the Asian markets suggests further volatility thanks to ongoing short-selling issues. The Asian markets have a solidly negative lead from Europe and the U.S. - and they may open that way, but bargain hunters may emerge later in the day to boost the oversold bourses.

The KOSPI finished sharply lower on Friday with damage across the board - especially among the financials, technology stocks and industrials.

For the day, the index plunged 92.84 points or 3.03 percent to finish at 2,976.21 after trading between 2,962.70 and 3,100.22. Volume was 972 million shares worth 23.8 trillion won. There were 830 decliners and 66 gainers.

Among the actives, Shinhan Financial plunged 4.81 percent, while KB Financial retreated 1.95 percent, Hana Financial plummeted 5.36 percent, Samsung Electronics sank 2.03 percent, LG Electronics fell 6.99 percent, SK Hynix fell 0.41 percent, LG Chem tumbled 2.24 percent, Lotte Chemical cratered 4.92 percent, S-Oil dropped 2.85 percent, SK Innovation climbed 1.27 percent, POSCO lost 1.80 percent, SK Telecom declined 1.61 percent, KEPCO surrendered 2.77 percent, Hyundai Motor tanked 3.98 percent and Kia Motors skidded 6.46 percent.

The lead from Wall Street is broadly negative as the major averages opened solidly in the red on Friday and saw the losses accelerate as the session progressed - offsetting gains from the previous day.

The Dow plummeted 620.78 points or 2.03 percent to finish at 29,982.62, while the NASDAQ tumbled 266.46 points or 2.00 percent to end at 13,070.69 and the S&P 500 lost 73.14 points or 1.93 percent to close at 2,714.24. For the week, the Dow, NASDAQ and S&P all fell 3.5 percent.

The sell-off on Wall Street reflected concerns about recent market volatility of heavily shorted stocks like GameStop (GME) and AMC Entertainment (AMC) - which moved sharply higher after Robinhood eased restrictions on certain stocks that have recently skyrocketed.

The spikes by the heavily shorted stocks have been described as a retail investor revolt, raising concerns that hedge funds may have to sell other securities to make up for their losses.

In economic news, the Commerce Department noted a much bigger than expected increase in personal income in December, along with a modest decrease in personal spending. Also, the University of Michigan said consumer sentiment deteriorated more than expected in January.

Crude oil futures settled lower Friday as worries about the outlook for energy demand due to rising coronavirus cases and delays in vaccine supplies weighed on prices. West Texas Intermediate Crude oil futures for March ended down $0.14 or 0.3 percent at $52.20 a barrel.

Closer to home, South Korea will provide January numbers for imports, exports and trade balance later this morning. Imports are tipped to rise 1.9 percent on year after gaining 1.8 percent in December. Exports are called higher by an annual 9.8 percent, slowing from 12.6 percent in the previous month. The trade surplus in December was $6.94 billion.