Korean stocks will continue to rise this week but the gains will likely be limited by rising oil prices and other economic woes stemming from Japan’s earthquake and continuing war in Libya, analysts said.
The benchmark KOSPI ended last week at 2,127.97, up 6.96 points or 0.32 percent from a week earlier, extending its rally of weekly gains to a fourth consecutive week.
The total market cap also reached a new high of 1,192.98 trillion won ($1.10 trillion) at Friday’s close.
The gains came largely from continued buying from foreign investors, who extended their buying streak this week to an 18th session, only one session shy of the record.
The net amount of buying by foreign investors, however, was halved to about 1.1 trillion won this week from 2.27 trillion won a week earlier.
Analysts said Seoul stocks did better than earlier expected as many economic woes, including the rising oil prices that are hitting new records daily, continued to add downward pressure.
“The KOSPI nearly remained still despite Samsung Electronics’ worse-than-expected earnings preview, Portugal’s request for financial aid and a hike of key rates by the European Central Bank,” said Lee Seung-woo, an analyst from Daewoo Securities.
Lee said the economic woes, also stemming from the earthquake and tsunami in Japan, will continue to put downward pressure on Seoul stocks this week.
“The focus on macroeconomic conditions will likely shift to actual numbers as local and foreign firms will begin revealing their first-quarter results,” he said. “There is also a need to watch out for any price hike of raw materials and crude oil.”