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Seoul shares expected to move in tight range next week

All Headlines 10:00 December 02, 2017

SEOUL, Dec. 2 (Yonhap) -- South Korean shares are expected to move in a tight range next week as investors could take a wait-and-see attitude ahead of a rate decision in Washington, analysts said Saturday.

The main stock index closed at 2,475.41 on Friday, down 2.7 percent from a week ago.

Investors are likely to remain cautious on the Federal Open Market Committee meeting scheduled on Dec. 12 and 13, though a rate hike has long been anticipated, Cape Investment & Securities said in a report.

Earlier this week, the Bank of Korea raised the base rate by a quarter percentage point to 1.5 percent for the first time since June 2011, citing clear signs of economic recovery and low inflation pressure.

Cape Investment & Securities said the country's benchmark Korea Composite Stock Price Index could have upward momentum in a medium- to long-term perspective, but local stocks are expected to move up and down in a tight range in the short term.

Another factor that could drag down the index is a lack of confidence on corporate earnings in the fourth quarter, according to the brokerage.

It said that the main stock index is likely to trade at between 2,470 and 2,530 points in the coming week.

Kim Byung-yeon, an analyst at NH Investment & Securities Co., said he expected the main index to trade at the 2,440-2510 range next week, citing expectations of improved relations between South Korea and China.

A planned summit between Seoul and Beijing comes after China has decided to partially lift bans on group tours to South Korea, allowing offline tourist agencies in Beijing and Shandong Province to sell package tours to South Korea.

The ban was part of China's economic retaliations against South Korea in protest of the deployment of the U.S. missile defense system in South Korea. China claims the Terminal High Altitude Area Defense system could hurt its security interests.

entropy@yna.co.kr
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