Seoul shares forecast to trade in narrow range this week

South Korean shares are likely to remain in a tight range this week as the US dollar is showing signs of continued strength against the Korean won, analysts said Saturday.

The benchmark Korea Composite Stock Price Index closed at 2.049.12 points on Friday, up 1.2 percent from a week ago. 

Foreign investors remained net buyers of local stocks for an eighth consecutive session.

The country‘s foreign exchange market saw increase in volatility this week, after the minutes of the Federal Reserve’s December meeting failed to give a clear indication about when it will next increase its interest rates.

A strong US dollar and concerns about capital outflows are expected to continue to weigh on the local equity market next week.

Kim Sung-hwan, a researcher at Bukook Securities, said an upward momentum for the Kospi is slowing as the US dollar is showing signs of further strengthening ahead of the inauguration of US President-elect Donald Trump.

However, the local equity market would be positively affected by upbeat economic data from the US, China and other emerging markets, Kim said.

Lee Hyun-joo, a researcher at NH Investment & Securities, said foreign investors have continued to buy Korean stocks despite the US dollar‘s strength.

Some analysts said the Kospi is expected to test as high as 2,060 level this week. (Yonhap)