Seoul stocks expected to advance next week on chip market recovery

SEOUL, Feb. 15 (Yonhap) -- South Korean stocks will likely continue their upward movement next week largely led by tech gains, despite the lingering effects of the new coronavirus outbreak, local analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 2,243.59 Friday, up 1.4 percent from a week earlier.

"Major stocks markets in Asia faced increased fluctuations this week due to the spread of the coronavirus," NH Investment & Securities analyst Noh Dong-kil said, noting the number of confirmed cases in China jumped by more than 10,000 to over 60,000 on Thursday.

"This was largely due to China's health authorities expanding the scope of people infected with the virus. As the increase in the number of confirmed cases is due to a change in the criterion for diagnosis, investors will likely abandon their preference for safer assets," Noh added.

The analyst also noted when the country faced the SARS outbreak in 2003, the KOSPI began to rebound a month before the number of infection cases reached its peak.

"The Chinese government and experts believe the peak will be reached in late February. There is little possibility the stock market will give up its advances so far," he said.

Instead, the local market will likely get a further boost from improved outlooks for the global chip market, Noh insisted.

"The KOSPI may experience some fluctuations but will likely maintain its upward movement on the global economic recovery and expected rise in profit for chipmakers," he said.

South Korea's exports had dropped for 14 consecutive months as of January, partly due to low global prices of semiconductors that account for nearly one quarter of the country's overall exports.

Foreign investors were net sellers this week, dumping a net 244.7 billion won (US$206.8 million) worth of local shares. Institutions sold a net 134 billion won while individuals purchased a net 256 billion won.

bdk@yna.co.kr
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