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Seoul stocks likely to move in tight range over Evergrande woes, virus concerns

South Korean stocks are likely to move in a tight range next week amid uncertainties from a Chinese developer's debt crisis and the local surge of new coronavirus cases, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 3,125.24 points Friday, down 0.49 percent from a week ago. Stock markets were closed Monday through Wednesday this week for the Chuseok holiday.

The losses came as investors digested the U.S. FOMC meeting results that said the Fed could begin reducing its asset-buying program in November and finish the process by next year.

Investors also kept a close eye on the debt fiasco at China's Evergrande Group, one of the country's largest property developers, which has increased volatility in the global financial markets for the past few days.

Analysts said the country's virus surge and the Evergrande debt crisis would continue to influence the local stock prices in the coming week.

"It seems like the most volatile time for the global stock markets (related to Evergrande and the U.S. tapering) has passed as of the Chuseok holiday, and we are expecting that the KOSPI would stay boxed," NH Investment & Securities analyst Kim Young-hwan said.

"Investors are also concerned that South Korean corporate earnings will peak out, which is keeping the KOSPI in a tight box," he said.

A record surge in local virus cases also raised worries that the country's tight virus curbs may be prolonged.

Local new COVID-19 cases reached an all-time high of 2,434 on Friday, largely due to mass migration during the Chuseok holiday.

Cases in the heavily populated Seoul area topped 900 for the first time. (Yonhap)