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Seoul stocks likely to move in rangebound trading next week

All News 10:00 June 17, 2017

SEOUL, June 17 (Yonhap) -- South Korean stocks are expected to move in a tight range next week, as investor appetite for risky assets is likely to be further dampened following the U.S. rate hike, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 20.31 points from last week, closing at 2,361.38 on Friday.

This week, the local stock market started by dropping 1 percent as foreign investors and institutions cashed in recent gains following overnight Wall Street losses. Major U.S. benchmarks ended lower due to losses in heavy tech shares.

But local stocks moved up and down in a tight range, and finished lower on Thursday following the Federal Reserve's decision to mark up the benchmark rate. On Wednesday (local time), the U.S. Federal Reserve, as expected, raised its policy rate by 0.25 percentage point and said it plans to reduce its securities holdings, a move that could spur rates to rise further moving forward.

Analysts said they expected the main stock index to trade at between 2,330 and 2,390 points in the coming week.

"There are some concerns of the outflow of capital as the U.S. rate hike made its target range for federal funds rate from 1 to 1.25 percent, a level that's on par with South Korea's," said Kim Byung-yeon, an analyst at NH Investment & Securities Co.

Other key events to watch next week include a preview of earnings by major South Korean companies for the second quarter as well as other developments taking place in Japan and the United States.

khj@yna.co.kr
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