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Seoul shares to move in tight range next week on trade dispute

All Headlines 10:00 June 08, 2019

SEOUL, June 8 (Yonhap) -- South Korean stocks are expected to move in a tight range next week with the market focus shifting to the upcoming G-20 summits, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 2,072.33 Friday, a 1.5-percent surge from a week ago.

The index rose three out of four trading sessions as the market sentiment was buoyed by the U.S. Federal Reserve chairman's comments signaling rate cuts later this year to buffer potential fallout from trade tension with China.

Institutions bought local shares for three sessions in a row, moving in the opposite direction of foreigners who dumped local shares amid lingering concerns over slowdown in the South Korean economy that is heavily reliant on exports to China and the U.S.

South Korea's exports declined by more than expected in May, extending their slump for the sixth consecutive month. The country's current account balance was in the red in April, the first deficit in seven years.

Construction and tech shares were among the biggest weekly gainers, while insurance and utilities were at the bottom.

"Despite the Fed's hinting at rate cuts and optimism for eased trade tension, the KOSPI made moderate gains due to uncertainties ahead of the G-20 summit and the tepid outlook for major exporters," Kim Byong-yeon, an analyst at NH Investment & Securities, said.

"Investors are expected to take a wait-and-see mode before Washington and Beijing make any progress in their trade talks."

Investors will pay keen attention to U.S. Treasury Secretary Steven Mnuchin's upcoming meeting with People's Bank of China Governor Yi Gang during a meeting of G-20 finance leaders in Japan over the weekend to get an indication of their stance on the ongoing trade tension.

U.S. President Donald Trump said on Thursday he would decide whether to enact $300 billion tariffs on Chinese goods after the G-20 meeting in Japan on June 28-29, where he is expected to meet with Chinese leader Xi Jinping.

ejkim@yna.co.kr
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