Korean stocks are projected to move in a narrow range this week, with a global oil price hike and a weak yen to remain as wary factors that may weigh on the key index, analysts said.
The benchmark Korea Composite Stock Price Index shed 0.80 percent to close at 2,018.30 last week from a week earlier, as investor sentiment was dampened by China’s lower growth target at 7.5 percent for this year.
The KOSPI had dropped as much as to the 1,970 range after the private creditors in Greece were reportedly refusing to accept the debt swap measure, a precondition for the additional 130 billion euro rescue fund the debt-mired country needs to avoid a messy default.
As Greece reached its final stage of gathering more than 85 percent of the bondholders to write down their debts, the stocks rebounded quickly, with foreign investors coming back to scoop up shares after a five-day selloff.
A slew of upbeat economic data in the United States also shored up the KOSPI’s rally, analysts said.
However, rising oil prices and a weak yen will likely put pressure on the index’s move. The Dubai crude oil has hovered above $120 per barrel, with the Japanese currency losing ground to around 80 yen against the U.S. dollar.
Korea, a major export-driven Asian economy whose energy source heavily relies on oil imports, cannot stay unscathed by such trends in the global market, experts said.
“Even with eased Greece woes, there seems to be no predictable momentum in the market if the rise in oil prices and a weaker yen persist,” said Lee Seung-woo, an analyst at Daewoo Securities Co.
Foreigners unloaded a net 1.48 trillion won ($1.32 billion) worth of local equities in total last week. Institutions also sold off a net 8.8 billion won, while retail investors snapped up a net 1.21 trillion won.
Tech giant Samsung Electronics surged to a record on Friday, pulling up the KOSPI on the back of a surprising earnings outlook for the first quarter. (Yonhap News)
