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Seoul stocks tipped to remain under selling pressure next week

By Yonhap

Published : Jan. 30, 2021 - 11:35

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A currency dealer is seen gazing at an electronic board showing South Korean stock market performance at the headquarters of KB Kookmin Bank on Friday. (KB Kookmin Bank) A currency dealer is seen gazing at an electronic board showing South Korean stock market performance at the headquarters of KB Kookmin Bank on Friday. (KB Kookmin Bank)
South Korean stocks are likely to come under selling pressure next week following this week's choppy trading, as market volatility is expected to remain high over massive foreign selling and profit-taking.

The benchmark Korea Composite Stock Price Index closed at 2,976.21 points Friday, down 5.24 percent from a week ago.

The index crashed below the 3,000-point level for the first time since surpassing the psychologically important threshold on Jan. 7.

The fall was largely attributed to foreign investors who dumped a net 5.3 trillion won on the main bourse this week. Retail investors bought a net 8.3 trillion won, limiting the index's fall, while institutions sold a net 2.9 trillion won.

Analysts said the Kospi may further decline in the coming week, largely due to the Korean won's ascent to the US dollar and the still fragile economic rebound from the pandemic.

"Large caps are likely to undergo stronger price adjustment, as foreign investors are expected to keep selling amid the weakening Korean won against the US currency," NH Investment & Securities analyst Noh Dong-kil said.

"Investors also may question the speed of recovery, because the delay in vaccine supply is undermining market optimism," he added.

Although analysts mostly bet on the Kospi's loss next week, they predicted that the index would eventually rebound from the short squeeze.

"The recent adjustment shouldn't be seen as a sign of a future crash," Hana Financial Investment analyst Lee Jae-sun said.

"With the global recovery still on track, local chip, pharmaceutical and auto shares are expected to lead the Kospi's gain down the road," he added. (Yonhap)