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Seoul shares to trade in tight range next week

All Headlines 10:16 January 18, 2020

SEOUL, Jan. 18 (Yonhap) -- South Korean shares are likely to remain in a tight range next week as investors attempt to cash in recent gains following a rally driven by hopes for a trade deal between the United States and China, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 2,250.57 points on Friday, up from 2,206.39 points a week earlier.

The index rose for the second consecutive session on Tuesday as investors were buoyed by hopes for an improvement in trade relations between Washington and Beijing, with the signing of their trade deal drawing near.

The index then took a breather on Wednesday on reports that U.S. tariffs on Chinese goods will remain in place even after a preliminary trade deal was signed later in the day.

The KOSPI picked up momentum on Thursday, with large-cap chip shares continuing to build gains.

On Friday, the index advanced to breach the 2,250-level, ending at a 15-month high on a rosy economic outlook for Asia's fourth-largest economy and Samsung Electronics' record share price.

Analysts said investors will keep their eyes open amid an upbeat assessment of economic conditions by the Bank of Korea and a positive outlook for the chip industry next week, although any further gains will be limited due to investors cashing in gains.

"The trade deal between the U.S. and China is expected to create momentum for the local index in the mid-to-long term," said Kim Yoon-bo, an analyst at Cape Investment & Securities Co. "However, there will be profit-booking attempts following the rally."

Foreigners and individuals purchased a net 411 billion won (US$355 milllion) and 623.6 billion won worth of local stocks, respectively, this week. Meanwhile, institutions offloaded a net 1.87 trillion won.

Kim forecast the KOSPI to trade between 2,210 points and 2,290 points in the coming week.

khj@yna.co.kr
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