Published : 2013-08-24 11:04
Updated : 2013-08-24 11:04
Seoul shares are expected to trade almost flat next week as investors are expected to sit on the sidelines amid rising concerns over a cut in the Fed's quantitative easing, analysts said.
The country's key stock index, the KOSPI, shed 2.6 percent this week to close at 1,880.71 on Friday.
Earlier this week, the local stock market traded almost flat as investors awaited the July minutes of the U.S. Federal Reserve's monetary meeting, which were released on Thursday, U.S. time.
The Fed's reduction of its massive bond purchases is expected to trigger a huge outflow of foreign funds from Asia.
South Korean stocks continued to drop 0.98 percent Thursday, extending the losing streak for a fifth consecutive session, as the Fed's minutes reaffirmed a gradual scaling-back of its bond-buying program.
But the Fed again avoided stating the timing of the stimulus cut in the transcript, intensifying the possibility of a September retreat speculated by many analysts.
Seoul shares, however, rebounded Friday, heightened by signs of improvement in advanced economies.
British bank HSBC said Thursday the Purchasing Managers Index (PMI) for China's manufacturing sector reached to a four-month high at 50.1 in August. China is the biggest trading partner of South Korea.
The PMI is an index that measures the health of a country's manufacturing sector. A reading of 50 or above represents an expansion of the sector from the previous month, while a reading of below 50 represents a contraction.
The composite PMI for the eurozone also came to 51.7 in August, which marked the highest level in 26 months.
Weekly foreign net buying totaled 200 billion won ($179 million). In contrast, institutions and individuals offloaded a net 410 billion and 240 billion won, respectively.
Analysts said Seoul shares are expected to trade flat as the rising woes over a cut in the U.S. stimulus moves is anticipated to continue to weigh down on the Asian stock markets.
"Meanwhile, the local stock market may also gather ground next week to recoup large-scale losses made this week," said Han Chi-hwan, an analyst at KDB Securities Co.
Shares lost ground across the board this week, with techs and carmakers falling 0.9 percent and 1.3 percent, respectively.