The South Korean stock market is expected to move sideways throughout this week from lack of clear momentum as investors gauge fourth-quarter corporate earnings and wait for the results of the Federal Open Market Committee meeting, analysts said Saturday.
The benchmark Korea Composite Stock Price Index gave up 0.03 percent from the previous week to close at 1,940.56 Friday.
Earlier in the week, Seoul shares managed to gather some headway, in part helped by China taking steps to inject more liquidity into the market and higher global economic growth prediction from the International Monetary Fund.
These gains were effectively canceled out by lackluster earning reports by major companies such as Samsung Electronics, and carmakers Hyundai Motor and Kia Motors.
China‘s manufacturing sector concerns and worries that the U.S. economy is not recovering as quickly as expected also contributed to a weaker bourse.
Reflecting sluggish market conditions, foreign investors offloaded 230 billion won ($213.7 million) worth more of local stocks than they bought throughout the week, offsetting the 100 billion won in net buying by institutional investors. Individual investors also bought 100 billion won more than they sold off throughout the week as they engaged in bargain hunting.
For next week, market watchers say they don’t foresee any clear momentum developing to move the market.
“Actions that can be taken by the FOMC have largely been reflected, so it is unlikely to exert a huge impact,” said Lim Dong-rak, a researcher at Hanyang Securities Co.
He stressed that with larger economic fundamentals remaining uncertain and local companies unlikely to announce any surprise earning gains, the KOSPI will be “locked” in a narrow band.
Lim added that start of the three-day Lunar New Year holiday on Thursday could further hinder funds from entering the market.
Daewoo Securities Co. said the bourse will probably move within a band of 1,930 to 1,980, with trading volume likely to be low.
With January almost gone, any rally will have to wait until February, analysts said, adding the bourse may be able to gather speed if uncertainties in exchange rates are addressed. (Yonhap)
