SEOUL, March 28 (Yonhap) -- South Korean stocks are likely to suffer increased volatility next week, as investors will focus more on the developments in the novel coronavirus pandemic despite stimulus measures around the globe, analysts said Saturday.
The benchmark Korea Composite Stock Price Index (KOSPI) closed at 1,717.73 points Friday, sharply up 17.84 percent from a week ago.
The index experienced an extended market rout this week, with bourse operators issuing trading halts Monday and Tuesday over severe market fluctuation.
The KOSPI suffered a 5.34 percent plunge to start the week, but advanced 8.6 percent Tuesday, its largest daily percentage increase since Oct. 30, 2008, and extended gains with a 5.89 percent rise Wednesday after major economies vowed stimulus packages to tackle the economic fallout from the COVID-19 crisis.
The index snapped its two-day recovery Thursday with a 1.09 percent drop, but bounced back again with a 1.89 percent gain the following day.
Analysts said the KOSPI will test the 1,750-point level next week, but its direction will ultimately depend on novel coronavirus infections globally.
"Financial markets appear to have digested coronavirus stimulus measures," Kim Byeong-yeon, an analyst at NH Investment & Securities, said. "Investors will focus on effectiveness of stimulus measures and whether the COVID-19 crisis is improving."
Analysts said investors will also keep an eye on economic data from major economies next week, including manufacturing indexes from the U.S. and China.
"The market will look into March economic data released by major countries, but since many people have been already expecting bad results, there is a possibility that the impact from the data may be limited," Kim Yong-goo, an analyst at Hana Financial Investment, said.
This week, foreigners dumped a net 1.9 trillion won (US$1.5 billion) worth of local stocks and extended their selling streak to 17 consecutive trading sessions. Institutions sold a net 34.1 billion won, while retail investors bought a net 1.7 trillion won.
Among gainers, insurance firms surged by more than 20 percent this week. Shares in steelmakers spiked more than 16 percent.
Analysts predicted that the local currency is likely to gain ground against the U.S. dollar next week, as the U.S. Federal Reserve has vowed unlimited quantitative easing.
The South Korean won closed at 1,210.6 won against the U.S. dollar Friday, sharply up 22.2 won from the previous session's close.
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