Seoul shares likely to move in tight range in coming week; US election in focus

(Yonhap)

South Korean shares are likely to move in a tight range in the coming week amid rising uncertainties from the presidential election and stimulus talks in the United States, analysts said on Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 2,341.53 points on Friday, dropping 2.11 percent from the previous Thursday, the last session before the holiday weekend.

Local analysts attributed the KOSPI's weekly decline to the resurgence in COVID-19 outbreaks at home.

South Korea added 47 new COVID-19 cases on Friday, marking a steep fall from 110 the day before, according to the Korea Disease Control and Prevention Agency (KDCA).

In the coming week, South Korean stocks are likely to stay boxed within a tight range, largely on uncertainties from the US markets, analysts said.

"The U.S. stimulus talks are undergoing a difficult phase, making investors anxious about a possible vacancy in key fiscal policies," said NH Investment & Securities analyst Noh Dong-kil.

"Moreover, the election uncertainties may flare up again in the upcoming final debate," he added.

Analysts also picked the slower-than-expected progress in COVID-19 vaccine development as a potential drawback.

"The earlier market consensus was that the COVID-19 vaccine would come out between the fourth quarter this year and the first quarter next year," said KTB Investment & Securities analyst Park Seok-hyun. "Of the 10 drugmakers engaged in their third-phase clinical trials, some halted the tests," sapping hopes for early development of the vaccine, he added.

A flurry of earnings reports by global firms, including Microsoft, Amazon, Tesla and Netflix, are scheduled for the coming week.

On Monday, China will post its gross domestic product (GDP) for the third quarter, September retail sales and industrial output.

The final televised debate for the US presidential election is set for Thursday (Korea time).

The October manufacturing Purchasing Managers Index of the US, Germany and the eurozone will come out on Friday. (Yonhap)