South Korean stocks will likely continue to gain ground this week as improving U.S. economic indicators are expected to bolster investor sentiment, analysts said Saturday.
The benchmark KOSPI rose about 1.5 percent last week to close at 1,867.22 on Friday. The rise came despite a plunge on Monday caused by news of the death of North Korean leader Kim Jong-il.
Investors were spooked by heightened geopolitical risks, but soon turned their focus more to economic news coming from the U.S. and Europe.
Spain’s larger-than-expected debt sale and improving housing market data in the U.S. helped the index recoup ground lost during the Monday selloff.
Shares rose across the board, with construction and communications sectors posting about 4 percent and 3 percent gains.
Banks and machinery, however, ended lower last week.
Eurozone debt problems will keep unsettling investors’ minds but those concerns could subdue somewhat thanks to improved liquidity conditions there after the ECB recently awarded euro-region banks 489 billion euros ($638 billion).
What investors will pay more attention to will be indicators to be announced next week regarding housing markets, employment and manufacturing industries in the U.S., analysts said.
Many expect improving indicators for the world’s largest economy.
“Strong economic data from the U.S. are expected to abate the burden from the eurozone problems, though the overall market direction is unlikely to be determined until after the New Year,” said Lee Joo-ho, an analyst at Woori Investment Securities Co.
(Yonhap News)
