The South Korean stock market is expected to continue its upward trend this week as foreigners are anticipated to maintain their buying rally amid eased woes over the U.S. political impasse, analysts said Saturday.
The country’s key stock index, the KOSPI, advanced 1 percent last week to close at 2,052.40 on Friday.
Earlier last week, the local stock market was dented by concerns stemming from political tension in the U.S. over its debt limit.
However, the market returned to growth later in the week on optimism that U.S. lawmakers would draw up a solution to resume the government operations and increase the debt limit to avoid a sovereign default before the due date that fell on Thursday.
Seoul shares closed bullish Friday as the temporary deal reached between U.S. Senate leaders to raise the debt ceiling through Feb. 7 next year eased investors’ worries over the world’s largest economy.
China’s robust on-year economic growth for the third quarter of 2013, which came to 7.8 percent, also added to investor sentiment.
China is the biggest trading partner of the Asia’s fourth-largest economy.
Weekly foreign buying reached 1.1 trillion won ($1.03 billion), scooping up Seoul shares for the 36th consecutive trading sessions as of Friday.
Individuals and institutions, in contrast, offloaded a net 760 billion won and 326 billion won, respectively, last week.
Analysts said Seoul shares are expected to maintain their upward moves on the back of foreigners’ buying rally.
“As the U.S. economic indicators are anticipated to remain weak following prolonged political impasses, the Federal Reserve’s tapering of economic stimulus moves may be delayed,” said Han Chi-hwan, a researcher at KDB Daewoo Securities Co.
“A delay in the exit plan will provide the market with more liquidity and induce foreigners to maintain their buying rally,” Han added.
Banks and brokerages gained 3.6 percent and 2.8 percent this week, followed by mobile carriers with 2.3 percent and chemicals at 2.2 percent. Food producers, in contrast, lost 2.8 percent. (Yonhap News)
