Shares may gain ground

By Korea Herald
  • Published : Feb 9, 2014 - 19:54
  • Updated : Feb 9, 2014 - 19:54
The South Korean stock market may gain ground this week on eased jitters over U.S. and emerging economies, analysts said Saturday.

But such a gain may be capped due to lingering woes over weakened corporate earnings and continued uncertainty, they said.

The benchmark Korea Composite Stock Price Index finished at 1,922.50 this week, down 1.3 percent from a week earlier.

The main index swerved in and out of the psychologically important 1,900-point level this week. The KOSPI dipped below the threshold on jitters over emerging markets and the U.S. economy, caving in to heavy selling by foreign investors.

“The KOSPI may continue its upward move, helped by a rebound in oversold shares,” said Lee Jung-min, an analyst at KDB Daewoo Securities. “But such a gain may be limited due to still lingering woes over the U.S. and Chinese economies.”

U.S. was below expectations on its January non-farm payroll announced Friday, adding 113,000 jobs, well short of around 180,000 that economists estimated. The U.S. stock market rallied nonetheless, but two straight months of disappointing jobs data left questions about the economic momentum in the world’s largest economy and whether the Fed acted prematurely on the stimulus cut.

The analyst said data coming from China may provide a clear picture on its fundamentals, which are likely to be worse than expected, and thus may put downward pressure on the local stock market.

“The KOSPI is expected to move in the range of 1,900 to 1,950 points next week.”

Analysts predict investors will be inclined to opt to gradually increase risky bets, but at the same time remain cautious on continued uncertainty.

Foreigners were net sellers of local equities this week, with 1.4 trillion won. Institutions snapped up a net 840 billion won, and retail investors bought a net 530 billion won.

Utility and construction companies were among the biggest gainers, each climbing 1 percent and 0.1 percent. In contrast, brokerage and machinery shares lost 5.3 percent and 4.2 percent, respectively. (Yonhap)