South Korean stocks will likely remain in a tight range next week on lingering uncertainties over the U.S. Federal Reserve’s rate decision and Britain’s possible exit from the eurozone, analysts said Saturday.
The benchmark Korea Composite Stock Price Index (KOSPI) closed at 1,967.17 on Friday, up 1 percent from a week earlier.
The index dipped to a three-month low on Tuesday, but bounced back the next day as securities firms rallied on expectations of extending stock trading hours by 30 minutes starting in August.
Refiners rallied on Friday as oil prices trimmed their earlier gains on increased production.
Shipping and telecommunication shares were top earners for the week, while retail and food shares were among the biggest losers.
Analysts expected investor sentiment to remain muted due to uncertainties surrounding the U.S. rate setting from June 14-15 and a Brexit ahead of a poll on June 23.
Foreigners are likely to remain net sellers as the rising possibility of the U.S. interest rate hike and Chinese yuan’s depreciation could weigh on their sentiment,” Ko Seung-hee, an analyst at Mirae Asset Daewoo, said.
Investors were expected to take a wait-and-see approach ahead of major economic events.
On June 1, South Korea will release its trade report. China’s official Manufacturing Purchasing Managers’ Index and the U.S.
Fed’s Beige book, a summary of current economic conditions, are also due on the same day.
The European Central Bank will hold a meeting on June 2 and the U.S. will release its latest jobs data the next day.
Investors will also pay keen attention to whether benchmark compiler MSCI will include China’s A-shares into a key emerging market investment index on June 14. Local analysts have expressed concerns that such a decision could move some of its funds from Korean shares to the mainland Chinese stock market. (Yonhap)