Seoul shares may face post-U.S. presidential election correction next week
SEOUL, South Korean shares may face corrections next week after enjoying a fifth consecutive day of rise on eased uncertainties over the U.S. presidential election, analysts said.
The benchmark Korea Composite Stock Price Index (KOSPI) closed at 2,416.5 points Friday, up 6.59 percent from a week ago.
The weekly gain came amid growing hopes for the victory of Democratic candidate Joe Biden and a Republican-dominated Senate — a combination hailed by investors as supportive to a fiscal spending expansion and difficult for a corporate tax increase.
EV battery makers and bio stocks were among the best performers this week.
But after a five-day winning streak on the election, analysts are warning that local stocks may have neared their short-term peak, ready for a price adjustment in the coming week.
“Markets seem to have strongly responded to the favorable short-term event, but once the election heat has cooled off, they will have to look at new sources of uncertainties,” NH Investment & Securities analyst Kim Young-hwan said.
“If (Donald) Trump begins a large-scale legal battle, the U.S. may not be able to reach a stimulus deal by early December (safe harbor deadline),” he said.
Source: Yonhap News Agency