The South Korean stock market is anticipated to rise this week on expected dovish remarks by some U.S. Federal Reserve Board members and possible gains in cyclical shares, analysts said Saturday.

The country’s key stock market index, the KOSPI, inched up 0.7 percent from a week ago to 1,949.26 on Friday.

Seoul shares got off to a strong start earlier in the week as institutions snapped up shares of builders and chemical firms despite lingering concerns over Greek election results, in which the anti-austerity Syriza party clinched victory.

The KOSPI, however, moved lower to the 1,950 level later in the week as the hawkish tone of a statement by the Federal Open Market Committee dampened investor appetite for risky assets.

Analysts said the KOSPI is likely to post gains this week if remarks by dovish Fed members Narayana Kocherlakota and Loretta Mester on Wednesday shore up investor sentiment.

“The latest Federal Open Market Committee statement, which was hawkish, stoked market volatility,” said Noh A-ram, an analyst at KDB Daewoo Securities. “If there are dovish remarks this week, they will raise hopes for a delay in the rate hike and have a positive effect on the stock market.”

A rebound in cyclical shares, such as textiles and industrial goods, is also anticipated to boost the KOSPI, they added.

Noh said that while earnings turned out to be lower than expected, their impact on the stock market is likely to be small as the link between earnings and stock prices tends to ease in the fourth quarter. 

(Yonhap)