Published : 2014-08-31 20:57
Updated : 2014-08-31 20:57
South Korean stocks may gain with a steady flow of foreign funds, but advances are not likely to be large due to lingering geopolitical concerns this week, analysts said.
The benchmark Korea Composite Stock Price Index ended at 2,068.54 last Friday, up 4.6 percent from the previous week’s closing.
In the beginning of last week, Korean shares picked up as foreigners loaded up on blue-chip stocks on hints of quantitative easing in the eurozone and the continuation of a low-rate policy by the U.S.
Federal Reserve. The rally, however, was dampened later last week as tension in Ukraine flared up again Thursday. Institutions turned sellers to cash in on overheated stocks.
Market watchers said domestic and tourism shares will advance this week because more Chinese tourists are expected during the upcoming Chinese holiday season and the Asian Games, which will run from Sept. 19 to Oct. 4 in South Korea’s western port city of Incheon.
“Domestic consumption shares, such as cosmetics, food and beverages, hotels and casinos, are expected to make some gains in the run-up to the events,” Jennifer Lee, an analyst at Daewoo Securities, said, expecting the KOSPI to remain in a range of between 2,050 and 2,100 points.
Traders are likely to watch out for major economic data, including South Korea’s August trade balance figures and second-quarter gross domestic product data, as well as Chinese manufacturing and U.S. labor data.
The European Central Bank has a rate-setting meeting on Sept. 4.
“South Korea’s August trade balance is forecast to show slow growth with strong exports to the U.S. and lagging outbound shipments to China and the eurozone,” Lee said.
“The government’s announcement for follow-up measures to boost the real estate market will be closely watched as well.” (Yonhap)