Go to Contents Go to Navigation

Seoul shares forecast to remain flat ahead of FOMC meeting

All News 10:00 January 23, 2016

SEOUL, Jan. 23 (Yonhap) -- South Korean shares are expected to trade in a limited range next week ahead of the U.S. Federal Open Market Committee (FOMC) meeting, with volatile oil prices likely to weigh down on investor sentiment, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 1,879.43 points on Friday, up 0.05 percent from a week earlier.

South Korean stocks closed nearly flat earlier this week as China's stock volatility took a breather. Seoul shares, however, gained ground later, as China's 2015 economic growth was in line with market expectations.

China reported that its economy expanded 6.9 percent on-year in 2015, the lowest annual growth rate since 1990. In the fourth quarter, the economy grew 6.8 percent on-year, marking the lowest gain since the first quarter of 2009.

The KOSPI dropped to a five-month low on Wednesday as foreign investors dumped shares amid fears over falling oil prices.

Overseas investors offloaded local shares throughout the remaining week, extending their sell-off run to 35 sessions on Friday, the longest selling streak ever, when excluding the net purchase observed on Jan. 6, following the block deal of Korea Aerospace Industries Ltd.

Seoul shares, however, managed to advance 2.11 percent as investors were heartened by the latest remarks by the head of the European Central Bank about considering additional quantitative easing.

Analysts said Seoul shares are anticipated to trade flat as investors are set to take a wait-and-see approach ahead of the FOMC meeting.

"The market consensus currently stands at freezing the interest rate. Considering the global financial market's volatility, there will be no rate hike in this meeting," said Ko Seung-hee, an analyst at KDB Daewoo Securities Co.

Major listed firms, including market behemoth Samsung Electronics Co. and LG Electronics Inc., are also expected to announce their fourth-quarter earnings report next week.

Foreigners offloaded 1.3 trillion won (US$1.1 billion) worth of local stocks this week, while individuals bought a net 200 billion won. Institutions scooped up a net 1.2 trillion won.

Drugmakers and retail shares were among the winners by rising 4.6 percent and 3.3 percent each, while insurance firms and medical firms traded bearish this week by moving down 5.4 percent and 5.1 percent.


Send Feedback
How can we improve?
Thanks for your feedback!