Seoul stocks tipped to see gains next week on U.S. stimulus hopes
SEOUL, South Korean stocks are likely to see gains next week as optimism for a massive infrastructure project by the United States is expected to continue to sway local financial markets, analysts said Saturday.
The benchmark Korea Composite Stock Price Index (KOSPI) closed at 3,112.8 points Friday, up 2.36 percent from a week ago.
The KOSPI finished the week at its highest level since Feb. 17, backed by an increase in foreign buying that was spurred by the U.S. president's unveiling of a US$2.25 trillion infrastructure proposal.
Local investors hailed the spending project as a source of momentum to help the global economy recover from the pandemic.
Foreigners purchased a net 1.2 trillion won (US$1.1 billion won) on the main bourse this week after dumping 1.3 trillion won the previous week.
Analysts said the KOSPI is likely to see gains next week, as more reports on U.S. stimulus spending are expected to increase investors' appetite for risk assets.
Improved earnings forecasts for local companies are also expected to keep the KOSPI above the 3,000-point mark, they said.
"The Biden administration's stimulus project seems to have changed foreigners' skepticism about the prospects of the South Korean information and technology shares," NH Investment & Securities analyst Noh Dong-kil said.
"The project includes large-scale spending for infrastructure, such as 5G broadband, factory automation and semiconductors," he added.
Some of the downside risks include the likely pushback in the U.S. Congress against the U.S. project and the hike in the U.S. Treasury notes, he said.
Source: Yonhap News Agency