South Korean shares will likely remain rangebound ahead of key U.S. indicators next week, but begin an upward march toward the end on a continued inflow of foreign capital, analysts said Saturday.
The benchmark Korea Composite Stock Price Index (KOSPI) closed at 1,983.81 on Friday, down 0.4 percent from a week earlier.
Foreign investors purchased a net 286 billion won ($244.2 million) worth of stocks. Both retail and institutional investors were net sellers as they sought to cash in on their gains.
The analysts said the KOSPI will likely sidestep at the beginning of next week as investors will wait to see key U.S. indicators due later in the week, such as consumer price.
“Foreigners are more or less driving the market, and they will likely take a breather at the start of next week. And the movement of the local stock market will likely be pegged to that of the U.S. dollar, at least for some time, amid a lack of any unfavorable conditions surrounding the market,” Bookook Securities analyst Kim Sung-hwan said.
Seo Sang-young, an economist at Kiwoom Securities, also noted the country will likely see the continued inflow of foreign capital.
On Friday, the local currency closed at 1,169.20 won against the U.S. dollar, down from 1,162.50 won a week earlier.
The strengthening of the U.S. greenback largely followed remarks from U.S. Federal Reserve officials hinting at a possible rate hike in April.
Kim insisted the remarks may have been intended at preventing a further decline of the U.S. dollar against its global peers due to a growing market expectation for a delay in U.S. rate hike.
“The remarks regarding a possible rate hike are creating some minor problems, but they are different from what we were told at the recent FOMC meeting, and the dollar will not continue to strengthen forever,” Kim said.
The analysts forecast the KOSPI to move in the range of between 1,960 and 2,020 next week.
(Yonhap)
