The South Korean stock market is likely to rebound next week on the back of rising hopes for an additional stimulus by the European Central Bank, analysts said Saturday.
The country’s key stock market index, the KOSPI, closed 1.9 percent lower on Friday than a week ago, on a continued slide in global oil prices that fell to their lowest levels in more than four years, and renewed concerns over Greece’s potential exit from the eurozone economy.
Analysts said South Korean shares are expected to creep up next week as investors keep an eye on the ECB’s policy meeting later this month.
“The positive event for the stock market next week, among others, is the meeting of the ECB slated for Jan. 22 and its potential quantitative easing,” said Noh Aram, an analyst at KDB Daewoo Securities Co.
“The ECB is forecast to announce plans to buy state bonds, and the amount is estimated to be around 500 billion euros ($581.7 billion).”
The local stock market was roiled by a series of economic events this week.
On Thursday, investor sentiment was dented as South Korea’s central bank kept the key rate at the current level of 2 percent. On Friday, the KOSPI plunged below the psychologically significant 1,900-point level, following the Swiss National Bank’s unexpected decision to scrap its currency cap against the shared currency.
Foreign investors went on a selling binge with a net sell-off of 741.6 billion won this week, while individual investors scooped up 657.9 billion won. Institutions sold off a net 479.1 billion won.
Chemicals, food and beverages, and pharmaceuticals were gainers this week, while logistics, banks and textile-related shares lost ground. (Yonhap)
