SEOUL: South Korean shares are set to advance further next week as demand for risky assets will remain strong following the Federal Reserve’s dovish stance on future rate hikes, analysts said Saturday.
The benchmark Korea Composite Stock Price Index (KOSPI) closed at 1,992.12 points on Friday, up 1.05 percent from a week earlier. Foreign investors scooped up 278.03 billion won (US$239 million) worth of stocks. Institutional investors and individuals sold a combined 306.50 billion won, limiting the KOSPI’s gains.
Analysts expected the KOSPI to move in the range of between 1,970 and 2,020 next week, with foreigners remaining net buyers of undervalued local stocks.
“Next week, domestic stocks will continue their rally, if not big, helped by investors’ growing appetite for emerging-market assets. But the rally may not last long due to a lack of investor confidence in economic fundamentals,” KDB Daewoo Securities analyst Ko Seung-hee said. Profit-taking by institutional operators of equity funds may weigh on the main index, he cautioned.
The country’s stock market got off to a weak start this week as investors took to the sidelines waiting for the results of the Fed’s rate-setting meeting. On Friday, a day after the Fed held rates steady and signaled two possible rate hikes this year instead of the four it envisioned previously, Korean stocks and currency hit their highest level this year.
The won closed at 1,162.50 against the greenback Friday, up 10.80 won from a session earlier. The technology and automobile sectors were among the top performers, rising more than 1 percent, while financials and machinery stocks traded bearish by falling about 1 percent.
