South Korean stocks are expected to trade higher this week as the plan by the European Central Bank to maintain its economic stimulus moves will boost investors’ sentiment, analysts said.
The benchmark Korea Composite Stock Price Index closed down 22.42 points, or 1.2 percent, to 1,833.31 on Friday from the previous week.
Earlier last week, the KOSPI remained flat as investors took a wait-and-see approach on the rising concerns over the Chinese economy and listed firms’ second-quarter earnings.
The stock market continued to remain stagnant as the yen-dollar exchange rates also breached the 100 yen mark to the greenback on Tuesday in the New York market for the first time in a month.
A relatively stronger won inflicts foreign exchange losses on local exporters, making South Korean goods more expensive overseas and damaging firms that compete with Japanese firms.
The KOSPI gathered ground later in the week on the United States’ optimistic job data. Companies added 188,000 new jobs to the private sector in the U.S. last month, hovering above the market estimate of 160,000, the ADP Research Institute said.
The index lost ground Friday as Samsung Electronics Co. estimated it had posted a record quarterly operating profit of 9.5 trillion won ($8.3 billion) in the second quarter of 2013. The guidance was lower than the market estimate of 10.2 trillion won.
Weekly foreign net selling totaled 320 billion won. In contrast, retail investors purchased a net 350 billion won and institutions scooped up a net 140 billion won.
Analysts said Seoul shares are expected to gather ground this week as the ECB’s decision to maintain its stimulus measures are anticipated to serve as a positive lead for the local stock market.
“The KOSPI will boast a limited growth this week on the back of policy hopes,” said Han Chi-hwan, an analyst at KDB Daewoo Securities Co. “However, Samsung’s lower-than-expected performance will also continue to weigh down on the market.” (Yonhap News)
