Seoul shares likely to trade lower on weak yen

By 옥현주

Published : Nov. 15, 2014 - 12:10

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The South Korean stock market is likely to trade lower next week on persistent uncertainties from the stronger Japanese yen, analysts said Saturday.

Seoul shares traded higher earlier in the week on news of a bilateral free trade agreement with China, a boon for South Korea's export-oriented economy. China is the country's biggest trading partner.

The market lost its shine later in the week as investors changed to a wait-and-see approach on the trade deal, forecasting that there will be a delay in seeing an actual positive impact on local industries.

Investors were unmoved by the Bank of Korea's decision to free the key rate, taking it in as an already expected outcome. The rate freeze had come after the central bank lowered the policy rate by a quarter percentage point in August and October to help bolster growth in Asia's fourth-largest economy.

The main bourse closed 0.27 percent higher than the previous week on Friday, capping the week with the much-anticipated debut of Samsung SDS, an IT and logistics services unit of Samsung Group.

Weekly foreign selling came to 92.6 billion won, while individual investors sold a net 372 billion won. Institutions scooped up a net 173.2 billion won.

Analysts said Seoul shares are expected to trade lower next week, dragged down by the weak Japanese yen that adversely affects local exporters by making South Korean goods more expensive than their Japanese counterparts.

"Foreign buying in South Korea continues to remain weak due to the weak yen, coupled with the slowing Chinese economy," said Noh Aram, an analyst at KDB Daewoo Securities Co.

Logistics, carmakers, and construction shares were major gainers this week, while banks and energy-related shares lost ground.

(Yonhap)

Seoul shares likely to trade lower on weak yen

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