Seoul stocks tipped to face correction this week

South Korean stocks are expected to come under selling pressure and hover below the 2,200-point level this week on mixed economic signals and a surge in new coronavirus outbreaks.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 2,201.19 points on Friday, up 2.4 percent from a week ago.

The index on Wednesday surpassed the psychologically important 2,200-point threshold for the first time since Feb. 19 on hopes of COVID-19 vaccine development and additional economic stimulus.

Analysts expected the index to stay below the psychologically important level this week.

"An additional US relief package may boost a further rise in the local stock market, but US political conflicts may add uncertainties," NH Investment & Securities analyst Kim Young-hwan said.

Dented expectations for Chinese consumption are another negative factor curtailing investors' appetite for risky assets, he added.

China's retail sales in June contracted 1.8 percent, far below the market consensus of a 0.5 percent rise.

Heightened valuation pressure, in addition to the rising coronavirus toll, is also expected to offset economic rebound hopes this week, they said.

A series of key economic events and indices are scheduled for this week.

The country's export data in the first 20 days of the month will be released, and the second-quarter economic growth estimate will come out on Thursday. (Yonhap)