Seoul stocks likely to move in tight range next week
SEOUL, South Korean stocks are likely to move in a tight range next week on eased market volatility as individuals and foreigners -- the driving forces behind the key stock index's stellar gains last month -- are expected to pull the key stock index in the opposite directions, analysts said Saturday.
The benchmark Korea Composite Stock Price Index (KOSPI) closed at 3,126.63 points Friday, up 4.85 percent from a week ago.
The KOSPI has undergone a major adjustment since last week due to rapid valuation pressure. The index lost 5.24 percent last week but recovered most of the losses this week, largely as foreigners turned to net buying.
"It is unlikely that the (KOSPI) would come under another round of big adjustment or make steep gains next week, considering valuation," NH Investment & Securities analyst Kim Young-hwan said.
"The KOSPI is expected to be boxed in a tight range and take its time to vent the valuation pressure," he said.
South Korean firms' improved earnings in the fourth-quarter also helped reduce the valuation, he added, suggesting a 3,000-3,150-point band.
"A more dramatic gain on the KOSPI would require massive individual buying, probably as aggressive as in January," Hana Financial Investment analyst Lee Jae-sun said.
In January, individuals bought a net 22.3 trillion won, while foreigners and institutions sold 5.2 trillion won and 7.4 trillion won, respectively.
Thanks to strong individual buying, the KOSPI closed at its all-time high of 3,208.99 points on Jan. 25.
Source: Yonhap News Agency