Seoul shares likely to make small advances ahead of BOK meeting

South Korean stocks are likely to trade slightly higher this week as foreigners are expected to be in the net buying position amid the strengthening of U.S. dollar against the Korean won, though the gains will be limited due to a lack of upward momentum, analysts said Saturday.

In the previous week, the Seoul bourse started the week on a negative note on the sluggish U.S. Black Friday sales and plunge in the global oil prices, but it rebounded in the mid-week on the upbeat U.S. Federal Reserve data that indicated signs of recovery in the world’s largest economy.

The upbeat sentiment muted after the European Central Bank on Thursday put off additional stimulus measures to early next year.

The benchmark Korea Composite Stock Price Index closed at 1,986.62 on Friday, up 0.2 percent from a week ago.

Weekly foreign net buying came to 210 billion won, while individual investors and institutions sold 290 billion won and 120 billion won each.

Market watchers expected foreign investors to continue to snap up recently-battered blue-chip stocks for bargain deals, bringing an inflow of offshore funds to offset selling by domestic investors.

A key economic event includes the Bank of Korea’s rate-setting meeting on Thursday, which is widely expected to maintain the 2 percent base rate for the second consecutive month, following two cuts earlier this year.

“Although the central bank is expected to freeze the key rate in the upcoming meeting, market expectation is high for an additional cut in the wake of China’s rate cut and the BOK’s lowered growth projection for next year,” said Noh A-ram, an analyst at KDB Daewoo Securities.

Analysts forecast the benchmark KOSPI will have modest gains in the coming week, moving in the range of 1,950 to 2,010 points. (Yonhap)