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Seoul shares forecast to face increased volatility next week

All Headlines 10:02 September 10, 2016

SEOUL, Sept. 10 (Yonhap) -- South Korean shares are expected to face volatile sessions next week on growing speculation that the U.S. Federal Reserve may raise key interest rates in the near future, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 2,056.24 points on Friday, up 0.28 percent from a week ago.

Next week, the local stock market will be closed from Wednesday to Friday as the nation celebrates the Chuseok fall harvest holiday.

The country's stock market started higher this week on a rally in top market Samsung Electronics Co. and eased concerns over an imminent rate hike in the world's largest economy with the key index hitting this year's high.

But profit-taking by retail and institutional investors dragged down the index.

On Friday, U.S. stocks suffered a sharp drop on growing worries that the Fed may raise key interest rates this year.

The Dow Jones Industrial Average shed 394 points, the biggest daily fall since Britain voted to exit the European Union, and the tech-laden Nasdaq Composite Index also fell 2.5 percent.

The Federal Open Market Committee is slated to meet on Sept. 20 for its rate policy review. The Fed has signaled that it may begin raising the rates given improving economic data.

This week, foreign investors scooped up local stocks worth 700 billion won (US$633 million), while institutional investors sold local stocks worth 500 billion won.

"A series of economic data due next week will set the overall tone for the market," said Kim Hyung-rae, an analyst at Mirae Asset-Daewoo Securities Co. "Hawkish comments by Fed officials will put a downward pressure on emerging markets," he said.

Electricity and utility stocks were among the winners by rising 4.3 percent, while pharmaceuticals traded bearish this week, moving down 4.3 percent.

sam@yna.co.kr
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