SEOUL: The South Korean stock market is expected to remain bearish next week as concerns over a possible U.S. interest rate rise are likely to continue to haunt investors, analysts said Saturday.
The benchmark Korea Composite Stock Price Index (KOSPI) closed at 2,010.23 points on Friday, down 0.98 percent from a week earlier. This week, Seoul shares kicked off lower on Monday due to the country’s weak exports and a slowing Chinese economy.
South Korea’s exports shrank 3.3 percent on-year to $46.61 billion in July, marking an annual drop for the seventh consecutive month. China’s Purchasing Managers’ Index (PMI), which measures its manufacturing activity, came to 50.0, hovering below the market’s estimate of 50.1.
The KOSPI edged up in the following trading session as investors hunted for bargains following the market’s steep fall in the past few sessions.
The rising possibility of a U.S. rate increase in September, however, weighed down on the market for the rest of the week. Analysts said the trend will continue next week as well.
“The stock market will likely remain unstable on a lack of momentum and U.S. rate woes,” said Kim Hyung-rae, an analyst at KDB Daewoo Securities Co. “A U.S. rate raise will have an adverse impact on the emerging markets by making the greenback stronger.”
Foreign investors offloaded a net 111.19 billion won (US$95.8 million) this week, while retail investors bought more shares than they sold at 143.88 billion won. Institutions sold a net 324.6 billion won.
Food and logistics firms were among the major leaders this week, while carmakers and insurance companies shares lost ground.
