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S. Korean stocks likely to remain range-bound next week

Stocks 10:00 May 18, 2019

SEOUL, May 18 (Yonhap) -- South Korean shares will likely continue facing downward pressure next week due to lingering effects of the trade dispute between the United States and China but largely remain range-bound, with some positive factors also expected, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 2,055.80 on Friday, down 52.6 points, or 2.5 percent, from a week earlier.

South Korean stocks got off to a weak start this week as the U.S. announced an increase in its import tariffs on US$200 billion worth of Chinese products to 25 percent from the previous 10 percent after the countries' trade negotiations ended without a deal last week.

Beijing retaliated with a threat to take similar measures against $60 billion worth of U.S. imports from June 1, again sending jitters throughout the globe.

Local shares slightly rebounded after U.S. President Donald Trump hinted at a possible deal down the road, saying he will meet his Chinese counterpart, Xi Jinping, at the upcoming Group of 20 summit in Japan next month.

Still, poorer-than-anticipated economic performance by Asia's fourth-largest economy further eroded investor sentiment, pushing the KOSPI down to the lowest level since Jan. 14, when the index stood at 2,064.52.

In April, Seoul's outbound shipments dwindled for a fifth consecutive month, with exports to China, the world's single largest importer of South Korean products, shrinking for a sixth consecutive month, government data showed earlier.

"The fluctuations in the market are expected to continue for some time partly due to the weakening of the Korean won and shrinking foreign demands," Ahn Jin-ah, a researcher from eBEST Investment & Securities, said.

However, the researcher said Eurozone economic indicators and an OECD report on growth outlook due next week may change the direction of the market, noting possible improvements in economic conditions in Europe.

Foreigners remained net sellers throughout the week, offloading a net 1.16 trillion won ($970 million) worth of local shares. As of Friday, foreigners remained net sellers for seven consecutive sessions, the longest streak since the start of the year.


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