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Seoul stocks likely to remain subdued next week on global woes

Stocks 10:00 August 24, 2019

SEOUL, Aug. 24 (Yonhap) -- South Korean stocks are expected to face volatile sessions next week on growing concerns of a global slowdown, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 1,948.30, up 21.13 points, or 1.1 percent, from 1,927.17 a week earlier.

"We expect to see a below neutral movement of the local stock market next week when the KOSPI will be put to a test to defend the psychologically important 1,900-point threshold," Hana Investment & Securities analyst Kim Yong-gu said.

This week, foreigners offloaded a net 268.5 billion won (US$221.8 million) worth of local shares, while institutions bought a net 134.1 billion won. Individuals scooped up a net 53.8 billion won.

Kiwoom Securities analyst Seo Sang-young said the direction of the local market next week will largely depend on U.S. Fed Chairman Jerome Powell's message at the Jackson Hole meeting set to end Saturday (U.S. time).

"Should (Powell) maintain his stance that the U.S. rate cut in July should serve as insurance as he said on July 31, the market would interpret it as a hawkish view that undermines the possibility of a rate cut in September, in which case the volatility may expand," Seo said.

Many, however, believe the U.S. Fed chair will likely hint at a rate reduction in the near future, citing the recent escalation of the U.S.-China trade dispute that followed the first U.S. rate cut in more than a decade last month.

"In such case, the local stock market will be expected to greatly rise," Seo said.

bdk@yna.co.kr
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