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Seoul stocks to face selling pressure on virus, regulation woes

(Yonhap)
(Yonhap)
South Korean stocks are likely to come under selling pressure next week amid concerns about the spreading virus variant and regulation fears that had led to massive sell-offs of giant platform companies.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 3,125.76 points Friday, down 2.35 percent from a week ago.

The weekly loss came as an increase in the country's new coronavirus cases raised concerns of an economic slowdown, in addition to regulatory move against fintech companies over their alleged unfair business practices.

Daily coronavirus cases exceeded 2,000 on Wednesday and Thursday, and eased to 1,857 on Friday.

Tech giants Kakao Corp. and Naver Corp. plummeted on concerns that regulations may be introduced to curb their dominance in the market.

Local analysts said stock prices are likely to face downward pressure next week, as regulation scares and virus woes continue to reverberate.

"The KOSPI stocks' 12-month forecast for earnings per share (EPS) fell back in the past two weeks, and it is too early to say that Korean firms' performance is going downhill, but the forecast for corporate earnings looks unlikely to be further raised," NH Investment & Securities analyst Kim Young-hwan said.

"The regulatory move against platform giants also emerged as a risk," he said.

Earlier this week, ruling Democratic Party lawmakers decried the market dominance of tech giant Kakao and its rapid business expansion, from banking to ride-hailing, in recent years.

On Friday, the chief of the Fair Trade Commission (FTC) echoed the concerns about growing "side effects" from how online platforms operate.

Next week, August consumer price gauge, and retail sales in the U.S. will be released, and South Korea and China are set to release the August jobs data as well. (Yonhap)
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