South Korea‘s benchmark stock index is widely expected to stage a rally at the start of the new year following a recent downturn sparked by massive foreign selling, sources said Sunday.
Foreign investors have been dumping South Korean shares this month to lock in gains in top-cap Samsung Electronics Co. and other tech issues, with their net selling reaching more than 1.8 trillion won (US$1.7 billion).
(Yonhap)
Offshore investors’ heavy selling has sent the benchmark Korea Composite Stock Price Index (KOSPI) dropping to the 2,400-point level. On Friday, KOSPI closed up 0.44 percent at 2,440.54, turning around from a 1.71 percent plunge Thursday.
With the key index losing momentum, expectations are growing that the stock market may resume its bullish run at the beginning of next year.
Market analysts said the main bourse has not lost its upward momentum in light of continued hopes for brisk corporate earnings and the economy‘s recovery.
“No extreme conditions have taken place to put an end to the stock market’s upturn,” said Lee Chang-mok of NH Investment & Securities Co. “Corporate earnings are expected to continue to rise in the new year amid low interest rates and consumer prices.”
In addition, market worries over the tech industry are forecast to dissipate as the global chip industry is widely expected to keep up its brisk business in the new year.
Some watchers have recently argued that the semiconductor industry has peaked out, leading to foreign investors‘ massive selling of Samsung Electronics and other tech behemoths.
Local brokerages remain upbeat about the performance of the main stock market in 2018. Daishin Securities Co. has forecast the KOSPI to surpass 2,500 at the start of next year and attempt to break the 2,600-point barrier.
Nomura Securities has projected the key stock index to reach 3,000 at the end of next year, while Swiss investment bank Credit Suisse has presented an estimate of 2,900. (Yonhap)
