ID :
31407
Fri, 11/21/2008 - 11:06
Auther :
Shortlink :
https://oananews.org//node/31407
The shortlink copeid
(News Focus) S. Korean stocks expected to fall further: analysts
By Nam Kwang-sik
SEOUL, Nov. 20 (Yonhap) -- South Korean stocks are unlikely to gain upward momentum for a while, but will remain extremely volatile on poor external and internal economic conditions, analysts said Thursday.
Extending its eight-session losing streak, the market was pummeled by Wall
Street's recent tumble as an increasingly gloomy outlook for the U.S. economy and
the murky future of U.S. automakers rattled investor sentiment.
The benchmark Korea Composite Stock Price Index (KOSPI) closed at 948.69,
dropping below the 1,000-mark for the first time since Oct. 29, while the Dow
Jones Industrial Average breached the 8,000-mark on Wednesday for the first time
since March 2003, closing at 7,997.28.
"The local market may fall further in the near future, cracking its lowest level
of 938.75 recorded on Oct. 24, due to fears that the global credit crunch may be
aggravated by Citigroup's mounting losses," said Kim Hak-gyun, an analyst at
Korea Investment Securities Co.
Shares of Citigroup Inc., the second-largest U.S. bank by assets, plunged 23
percent to a 13-year low on Wednesday due to its increasing losses from credit
cards, mortgages and bad debts.
Kim Joong-hyun, an analyst at Goodmorning Shinhan Securities Co. also said that
the local market will be weighed down by the possibility of a deepening global
economic downturn and local corporate credit crunch.
"There will be no catalysts to push the local market higher for the time being,
as the U.S. economy is troubled by growing fear of economic deflation and
troubled top three automakers," Kim said.
"In addition, the growing corporate credit crunch may trigger a chain of
bankruptcies in South Korea, placing a further burden on the local market, but it
is likely to swing sharply between gains and losses according to the situation,"
he added.
The U.S. Labor Department reported Wednesday that consumer prices fell one
percent in October from the previous month, the biggest fall since records began
in 1947, sparking off jitters over deflation.
U.S. stocks was also battered by worries that cash-strapped three US.
carmakers--General Motors Corp., Ford Motor Co, and Chrysler LLC.--might not get
a bailout from the government amid wrangling in Congress over the deal.
The number of business failures in South Korea came to 321 in October, up 118
from the previous month, hitting a three-year high from March 2005 when the
number reached 359, according to the Bank of Korea.
A rising inventory of new homes is fueling speculation that a chain reaction of
local builders' bankruptcies may hit the local financial system.
Bae Sung-yung, an analyst at Hyundai Securities Co., agreed with the cited
analysts on the views of the future direction of the market. "There are many
factors to put downward pressure on the market, but it is expected to move in a
tight range thanks to a technical rebound."
ksnam@yna.co.kr
(END)
SEOUL, Nov. 20 (Yonhap) -- South Korean stocks are unlikely to gain upward momentum for a while, but will remain extremely volatile on poor external and internal economic conditions, analysts said Thursday.
Extending its eight-session losing streak, the market was pummeled by Wall
Street's recent tumble as an increasingly gloomy outlook for the U.S. economy and
the murky future of U.S. automakers rattled investor sentiment.
The benchmark Korea Composite Stock Price Index (KOSPI) closed at 948.69,
dropping below the 1,000-mark for the first time since Oct. 29, while the Dow
Jones Industrial Average breached the 8,000-mark on Wednesday for the first time
since March 2003, closing at 7,997.28.
"The local market may fall further in the near future, cracking its lowest level
of 938.75 recorded on Oct. 24, due to fears that the global credit crunch may be
aggravated by Citigroup's mounting losses," said Kim Hak-gyun, an analyst at
Korea Investment Securities Co.
Shares of Citigroup Inc., the second-largest U.S. bank by assets, plunged 23
percent to a 13-year low on Wednesday due to its increasing losses from credit
cards, mortgages and bad debts.
Kim Joong-hyun, an analyst at Goodmorning Shinhan Securities Co. also said that
the local market will be weighed down by the possibility of a deepening global
economic downturn and local corporate credit crunch.
"There will be no catalysts to push the local market higher for the time being,
as the U.S. economy is troubled by growing fear of economic deflation and
troubled top three automakers," Kim said.
"In addition, the growing corporate credit crunch may trigger a chain of
bankruptcies in South Korea, placing a further burden on the local market, but it
is likely to swing sharply between gains and losses according to the situation,"
he added.
The U.S. Labor Department reported Wednesday that consumer prices fell one
percent in October from the previous month, the biggest fall since records began
in 1947, sparking off jitters over deflation.
U.S. stocks was also battered by worries that cash-strapped three US.
carmakers--General Motors Corp., Ford Motor Co, and Chrysler LLC.--might not get
a bailout from the government amid wrangling in Congress over the deal.
The number of business failures in South Korea came to 321 in October, up 118
from the previous month, hitting a three-year high from March 2005 when the
number reached 359, according to the Bank of Korea.
A rising inventory of new homes is fueling speculation that a chain reaction of
local builders' bankruptcies may hit the local financial system.
Bae Sung-yung, an analyst at Hyundai Securities Co., agreed with the cited
analysts on the views of the future direction of the market. "There are many
factors to put downward pressure on the market, but it is expected to move in a
tight range thanks to a technical rebound."
ksnam@yna.co.kr
(END)
