Seoul stocks likely to creep up on signs of global economic recovery

South Korean stocks are predicted to pull off modest gains this week as the global economy, led by the United States, may grow steadily at least until early 2015, analysts said Saturday.

The benchmark Korea Composite Stock Price Index finished at 1,964.84 last Friday, up 1.01 percent, or 19.7 points, from a week earlier.

The increase came as data emerging from the world’s largest economy showed signs of improvement in key areas such as real estate, manufacturing and the job market.

Predictions of more favorable exchange rates, and the likelihood of policymakers in the eurozone moving to stimulate growth, further propped up the market, which fell for three out of five trading sessions this week.

For this week, analysts predicted the bourse may move in the range between 1,940 and 2,000 points, with many expecting some sort of gain.

“There are signals showing the U.S. economy (is) doing well, and if this continues down the line, the KOSPI could manage to advance in the new week,” said Bae Sung-young, a researcher at Hyundai Securities.

He said investors will be keeping tabs on what measures will be taken by the Bank of Japan, and developments taking place in the eurozone.

The market watcher also said there is speculation that the exchange rate between the U.S. dollar and Japanese yen will stabilize soon, which could reduce one serious concern facing local exporters.

This view was echoed by Kang Hyun-gie, an analyst at I’M Securities & Investment, who said that while the KOSPI will still move to gauge how far stock prices could fall, it should be able to make some gains.

“There is a feeling that the global economy is entering a period of growth, at least for the near future, even though risks still linger,” he said.

He pointed out that unknown local companies in areas such as energy and industrial materials have started to move up.

On the other hand, Daewoo Securities, one of the country’s leading brokerage houses said that the KOSPI may remain bogged down as investors try to confirm what direction the global economy as a whole will take.

“The market will move in a relatively narrow band, not unlike what has happened recently,” the brokerage said. It, however, said that with the year-end shopping season approaching in countries such as the U.S., consumption may improve, which could bolster the market. (Yonhap)