South Korean stocks are expected to wind down their bullish run this week, as uncertainties over the U.S. Fed’s stimulus cut will likely weigh down investor sentiment ahead of its monetary meeting, analysts said.
The benchmark Korea Composite Stock Price Index shot up 2.4 percent on Friday from a week earlier, closing at 1,994.32.
The KOSPI rallied on the back of a strong streak of foreign buying, surpassing the 2,000 level to a three-month high, standing out among other Asian peers in the midst of growing concerns about faltering currency and stock markets in Indonesia and Malaysia.
“China’s solid exports data and easing Syria risks lent support to boosting the foreign inflow,” said Han Chi-hwan, an analyst at KDB Daewoo Securities Co.
This week, the Seoul bourse will likely move in a tight range as investors are predicted to stay cautious before the U.S. Federal Reserve announces its next move on the exit strategy to trim its bond purchases on Sept. 18, U.S. time.
Analysts said thus another rally in the aftermath of the Chuseok holiday, or the national harvest celebration, won’t likely happen this year.
“It’s hard to expect the KOSPI to gather further momentum when we know that the Fed issue is still enough to jolt the market,” Han added.
Foreigners scooped up a net 3.7 trillion won ($3.41 billion) worth of local equities last week. Most shares gathered ground across the board, with brokerage houses surging 5 percent and machineries and builders soaring 4 percent on average. (Yonhap News)
