Seoul stocks tipped to be in tight range next week on COVID-19, inflation woes

South Korean stocks are likely to continue fluctuating in a tight range next week amid concerns about a rise in new coronavirus cases and the rising inflation pressure.

The benchmark Korea Composite Stock Price Index closed at 2,936.44 points Friday, down 1.16 percent from 2,971.02 points a week ago.

After a technical rebound on Monday, the key stock index lost for a fourth consecutive day Friday amid woes over rising inflation and a sharp spike in new virus cases.

Investors took to the sidelines as the Bank of Korea on Thursday raised the country's policy rate by 0.25 percentage point to 1 percent and revised up its consumer inflation outlook for this year.

Virus woes also raised investors' caution, with daily new COVID-19 cases having reached 3,901 on Friday, two days after a record 4,115.

"Improved economic gauges may fan investors' worries about a key rate hike (by the US Federal Reserve), and lead to a further raise in the long-term US Treasury yields," NH Investment & Securities analyst Kim Young-hwan said.

Investors' eyes are also on the upcoming release of manufacturers' indexes, such as the Institute for Supply Management and the purchasing managers' index, which includes the supplier delivery data that shows how much the supply bottleneck has been relieved so far, he added.

Other key data due next week includes Chinese statistics agency's PMI for November and South Korea's November exports. Also, the U.S. jobs report is due Friday in Korean time.

Analysts also warned that the renewed concerns about the new coronavirus are likely to continue to dampen investor sentiment.

On Friday, the KOSPI dipped 1.47 percent, following news reports that a new variant strain of COVID-19 is spreading in South Africa and is set to spread further into other countries. (Yonhap)