Seoul shares likely to move in tight range this week

South Korean stocks are expected to continue range-bound trading this week following last week’s flat market, as lack of momentum will persist with jitters over the Greek debt issue in the eurozone, analysts said.

The benchmark Korea Composite Stock Price Index closed up 0.32 percent Friday at 1,955.52 from a week ago.

The main index started off the week higher on the back of a foreign inflow on anticipation that the eurozone would salvage Greece from a potential default by injecting liquidity.

But it didn’t take long for the KOSPI to turn bearish later in the week as the top two automakers here, Hyundai Motors and Kia Motors, drove down shares with their sluggish January sales.

The decision by the European Central Bank on Thursday to provide emergency funding to Greece fell short of whetting investor appetite for risky assets, while the weaker-than-expected manufacturing and payroll data in the U.S., released a day earlier, renewed concerns that the world’s No. 1 economy may be slowing in recovery.

Next week, the Seoul bourse will likely see a limited foreign inflow, overshadowed by the flip-flop negotiation on Greek debts among eurozone policymakers.

“It’s too early to expect a rally in the KOSPI because exporters won’t bring momentum either, while there are no clear signs as to where oil prices are heading,” said Yoseop Han, an analyst at KDB Daewoo Securities.

On the contrary, Han gave a positive outlook for the secondary KOSDAQ, predicting a bullish run next week backed by strong fundamentals in bio- and IT-related venture firms.

The tech-laden index rose to above the 600 mark on Thursday, which came for the first time in more than six years.

On the main bourse this week, foreigners offloaded local equities worth a combined 480 billion won, with retail investors dumping a net 200 billion won. Institutions scooped up a net 170 billion won.

Machineries were among the biggest gainers, rising 3.1 percent from the previous week, while telecom companies and autos fell 3.5 percent and 1.8 percent, respectively. 

(Yonhap)