(RTTNews) - The South Korean on Monday saw an end to the four-day winning streak that had collected 100 points or 10 percent along the way. The KOSPI pulled back sharply from resistance at 1,100 points, and analysts predict it will fall below 1,050 in Tuesday’s trade - and perhaps back below 1,000 points as well.

The global forecast for the Asian markets is sharply negative as economic data confirmed that the United States is indeed in a recession and has been for a year - heightening fears that the recession will grow worldwide and last for several years. The U.S. markets responded to the news with heavy losses that also were a bit of correction following major gains last week. The Asian bourses are also expected to move significantly to the downside.

The KOSPI finished sharply lower on Monday, dragged to the downside by heavy losses in the financial sector. The steel industries also finished lower, as did the automobile issues and the energy stocks.

For the day, the index lost 17.45 points or 1.6 percent to close at the daily low of 1,058.62 after peaking at 1,083.01. Volume was 620 million shares worth 4.6 trillion won. There were 460 decliners and 364 gainers, with 65 stocks finishing unchanged.

Among the decliners, steel giant POSCO slipped 1.91 percent, while Shinhan Financial Group slumped 3.28 percent, refiner SK Energy fell 1.2 percent and automaker Hyundai Motor shed 1.2 percent.

Wall Street offers a broadly negative lead as stocks moved sharply lower over the course of the trading day on Monday after turning in a strong performance last week. The major averages showed a steep drop at the open and continued lower throughout much of the session. The initial weakness came as investors took profits following the substantial gains seen last week, with the markets seeing further downside as investors reacted to some negative economic news as well as speeches from both Fed Chairman Bernanke and Treasury Secretary Paulson.

On the economic front, the Institute for Supply Management’s index of activity in the manufacturing sector fell to 36.2 in November from 38.9 in October, with a reading below 50 indicating a contraction in the sector. With the decrease, the index fell to its lowest level since May of 1982. Separately, the Commerce Department released its report on construction spending in the month of October, showing that spending fell by more than expected amid a notable decrease in spending on residential construction.

Speaking at an event hosted by the Greater Austin Chamber of Commerce in Austin, Texas, Federal Reserve Chairman Ben Bernanke said that further interest rate cuts from already low levels were “certainly feasible,” but he warned that the impact from any additional rate cuts would be “limited.” Bernanke said that the financial markets are better off for the moves authorities have taken lately, but he noted that absolute stability would take some time. He also predicted that the economy would likely remain weak for some time.

In his speech, Treasury Secretary Henry Paulson said that government actions taken to combat the financial crisis have made progress, though he noted that there is still much improvement that needs to be made. Paulson, who will be replaced as Treasury Secretary by New York Fed President Timothy Geithner when the next presidential administration takes over in January, also said that the government remains active in developing new programs.

The major averages saw some further downside going into the close of trading, ending the day at or near their worst levels of the day. The Dow closed down 679.95 points or 7.7 percent at 8,149.09, the Nasdaq closed down 137.50 points or 9.0 percent at 1,398.07 and the S&P 500 closed down 80.03 or 8.9 percent at 816.21.

In economic news, the South Korean economy expanded by 0.5 percent in the third quarter compared to the previous quarter, the Bank of Korea said in a revised report on Tuesday. The preliminary ready had shown a 0.6 percent quarterly increase. South Korea’s economy expanded 0.8 percent in each of the first two quarters of the year. On an annual basis, the South Korean economy grew 3.8 percent in the third quarter - down from the 3.9 percent annual increase from the preliminary report.

Also, exports in South Korea plummeted 18.3 percent on year in November, the Ministry of Knowledge and Economy said on Monday, marking the country’s biggest decline since 2001. That was sharply lower than forecasts that called for a decline of 11.2 percent following October’s 8.5 percent annual expansion. Imports also fell more than expected, coming in 14.6 percent lower on year in spite of forecasts that called for a fall of 5 percent. Imports had surged an annual 10.4 percent in the previous month. The trade balance remained a surplus at $297 million - but that was far less than the $1 billion surplus that had been expected. October saw a trade surplus of 1.21 billion.

Finally, South Korea’s Consumer Price Index increased 4.5 percent year-over-year in November, the National Statistical Office said on Monday, slower than 4.8 percent recorded in the previous month. Meanwhile, consumer prices excluding food and fuel rose 5.3 percent on an annual basis in November, compared with 5.2 percent rise in October.

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