Korea aims for 200,000 electric cars by 2020

Seoul shares likely to rise on Europe, China stimulus

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Published : 2014-03-01 10:43
Updated : 2014-03-01 10:43

The South Korean stock market is expected to gather ground next week on expectations of economic stimulus moves in Europe and China, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) gained 1.13 percent from the previous week to close at 1,979.99 Friday, supported by Seoul's economic plan announced early in the week. The three-year blueprint envisions broad deregulations, stimulating domestic demand and boosting the country's potential growth.

While the market growth was limited due to the rising concerns about the Chinese economy, cyclical industry shares continued to gather ground throughout the week. Cyclical industries refer to sectors whose performance depends heavily on economic fluctuations in comparison to those such as pharmaceuticals and foodmakers that make relatively steady earnings despite external changes.

Seoul stocks closed almost flat Friday as investors had mixed reactions to remarks by U.S. Fed Chairwoman Janet Yellen, who by attributing the latest weak U.S. data to unusual weather conditions boosted investors' confidence over fundamentals.

Weekly foreign buying came to a net 750 billion won (US$702.5 million) while institutions offloaded up a net 80 billion won and retail investors sold a net 650 billion won.

Analysts forecast that the local stock market would edge up ahead of economic policy meetings in Europe and China slated for next week.

Stimulus moves are expected when China holds its National People's Congress session on Wednesday and the European Central Bank (ECB) meets on Thursday, according to analysts.

"While foreigners are anticipated to scoop up IT and automobile shares, improved economic sentiment over China will also spark demand in cyclical shares such as chemicals and shipbuilders," said Jennifer Lee, a researcher at KDB Daewoo Securities Co.

Carmakers and brokerages advanced 4.7 percent and 3.9 percent this week, respectively, with tech firms also rising 3.1 percent. Steelmakers shed 2.9 percent.


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