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S. Korean stocks likely to see volatile sessions next week

All News 10:00 April 04, 2020

SEOUL, April 4 (Yonhap) -- South Korean stocks are expected to remain range-bound next week but begin to show upward movements on first quarter earnings and global efforts to minimize the fallout from the new coronavirus outbreak, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 1,725.44 on Friday, up 7.71 points, or 0.4 percent, from a week earlier.

The index plunged by more than 4 percent on Wednesday as foreign investors continued massive selling of local shares.

Foreigners remained net sellers all throughout the week and for 22 consecutive sessions since March 5.

They dumped a net 1.99 trillion won (US$1.62 billion) worth of local shares this week, while institutions sold a net 409.3 billion won. Retail investors purchased a net 2.35 trillion won.

The local stock market will continue to be affected by the new coronavirus pandemic, with its direction to be determined by the extent of the virus outbreak in major economies, including the United States, along with first quarter earnings results, analysts said.

"The stock market rebounded this week despite net selling by foreign investors for 21 consecutive sessions as of Thursday. This was largely the outcome of global policy measures that came in by the hour," Hana Financial Investment analyst Kim Yong-gu said.

"Next week, the market will pay close attention to first quarter earnings, starting with that of Samsung Electronics, which are due Tuesday," Kim added.

The analyst noted a drop in earnings may be inevitable amid the new coronavirus pandemic, but said better-than-anticipated results will likely keep the stock market from taking another dive.

Kim said recent conditions indicate "the stock market will likely make a gradual, upward movement, instead of W-shaped ups and downs."

Park Seok-hyun, an analyst at KTB Investment & Securities, agreed it will take time for the local market to recover.

"The economic indicators of South Korea and China in March turned out to be better than expected, but are still not strong enough to suggest a V-shaped recovery," said Park.

The analyst highlighted the need for additional stimulus measures, saying the fallout from the coronavirus outbreak may expand down the road due to a cut in exports to the U.S. and Europe, which have become the new epicenters of the novel coronavirus that originated in China late last year.

South Korea's exports, in terms of value, slipped 0.2 percent on-year in March, which marked a turnaround from a 4.5 percent on-year gain the month before but still a big improvement when considering a 10.3 percent plunge in 2019. In terms of volume, the country's exports jumped 13.1 percent last month, the sharpest on-year increase in 17 months.

bdk@yna.co.kr
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