Seoul stocks likely to face volatility next week on virus woes

SEOUL, South Korean stocks are likely to face increased volatility next week as hopes for strong corporate earnings square off against escalating virus woes.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 3,217.95 points on Friday, down 1.94 percent from a week ago.

The key stock index started this week with gains, thanks to upbeat outlook for corporate earnings in the April-June period.

But stock prices plunged in the last three sessions, largely due to the country's surging new coronavirus cases that prompted the authorities to implement semi-lockdown measures in the greater Seoul area.

This week, foreign investors dumped a net 1.95 trillion won (US$17 billion) on the main bourse, while retail investors bought 3.5 trillion won. Institutions offloaded a net 1.64 trillion won.

South Korea added 1,316 new daily cases of COVID-19 on Friday, marking the highest number since the first confirmed case on Jan. 20, 2020.

Starting Monday, private gatherings of three or more people will be banned after 6 p.m., with bars, sports games and in-person classes ordered to close.

Analysts expected local financial markets to face another week of volatility from the virus uncertainties amid upbeat earnings outlook.

"The economic indicators and corporate earnings (forecast) are promising, while the COVID-19 risk emerged as a reef," NH Investment & Securities analyst Kim Young-hwan said.

"Temporary adjustment and relatively high volatility may weigh down the stock prices, but it is unlikely that the virus would cause another economic crash," he added.

Next week, South Korea's jobless data for June will be released Wednesday.

The Bank of Korea (BOK) is set to hold its next monetary meeting Thursday. China's second-quarter gross domestic product (GDP) and U.S. retail and industrial output will be published the same day.

Source: Yohnap News Agency