South Korea Shares May Be Stuck In Neutral

The South Korea stock market bounced higher again on Wednesday, one day after halting the two-day winning streak in which it had gained almost 200 points or 5 percent. Now at a fresh record closing high, the KOSPI sits just above the 4,080-point plateau although investors may lock in gains on Thursday.

The global forecast for the Asian markets is murky on easing optimism over the outlook for interest rates. The European and U.S. markets were mixed and the Asian bourses are likely to follow suit.

The KOSPI finished sharply higher on Wednesday following gains from the technology stocks, chemicals and industrials, while the financial sector was mixed.

For the day, the index jumped 70.74 points or 1.76 percent to finish at 4,081.15 after trading between 4,014.84 and 4,084.09. Volume was 461 million shares worth 21 trillion won. There were 564 decliners and 304 gainers.

Among the actives, Shinhan Financial collected 0.54 percent, while KB Financial and LG Electronics both fell 0.34 percent, Hana Financial stumbled 2.39 percent, Samsung Electronics climbed 1.01 percent, Samsung SDI surged 6.09 percent, SK Hynix skyrocketed 7.10 percent, Naver rallied 4.74 percent, LG Chem advanced 0.85 percent, Lotte Chemical slumped 0.41 percent, SK Innovation improved 2.67 percent, POSCO Holdings strengthened 1.55 percent, SK Telecom gained 0.56 percent, KEPCO spiked 3.41 percent, Hyundai Mobis added 0.66 percent, Hyundai Motor accelerated 2.99 percent and Kia Motors jumped 1.94 percent.

The lead from Wall Street offers little clarity as the major averages opened higher and stayed that way for much of the day before slumping late in the session to finish mixed and little changed.

The Dow slipped 74.37 points or 0.16 percent to finish at 47,632.00, while the NASDAQ climbed 130.98 points or 0.55 percent to finish at a record 23,958.47 and the S&P 500 dipped 0.30 points or 0.00 percent to end at 6,890.59.

Early support came from the tech shares after Nvidia (NVDA) became the first company with a $5 trillion market capitalization.

The late-day weakness followed Federal Reserve Chair Jerome Powell’s comments after the central bank’s monetary policy announcement. While the Fed lowered interest rates by another quarter point as expected, Powell’s post-meeting remarks offset optimism for another rate cut in December.

Powell said a further reduction in rates in December is “not a foregone conclusion,” noting Fed officials had “strongly differing views about how to proceed” at the final meeting of the year.

Highlighting the high level of uncertainty due to government shutdown delaying key data, Powell also said there’s a “growing chorus” that feels the Fed should “wait a cycle” to continue cutting rates.

Crude oil prices bounced higher on Wednesday after a report from the Energy Information Administration showed a steep drop by U.S. crude oil inventories last week. West Texas Intermediate crude for December delivery was up $0.31 or 0.5 percent at $60.46 per barrel.