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Seoul stocks likely to extend gains next week on earnings, recovery hopes

All News 10:00 May 08, 2021

By Chung Joo-won

SEOUL, May 8 (Yonhap) -- South Korean stocks are expected to further advance next week as expectations of strong first-quarter corporate earnings and economic recovery run high.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 3,197.2 points on Friday, up 1.57 percent from 3,147.86 points the previous week.

The KOSPI started this week with losses from uncertainties over the lifting of the stock short selling ban.

Foreigners sold a net 806 billion won (US$718 million) on the main local bourse this week, while institutions bought a net 577 billion won. Retail investors purchased 236 billion won.

From Monday, the country's financial authorities lifted the short selling ban on 200 market heavyweights on the main bourse and 150 companies on the tech-laden Kosdaq market.

The index rebounded Tuesday and extended gains afterwards on strong economic data at home and in the United States.

Electronic signboards at a Hana Bank dealing room in Seoul show the benchmark Korea Composite Stock Price Index (KOSPI) closed at 3,197.20 on May 7, 2021, up 18.46 points, or 0.58 percent, from the previous session's close. (Yonhap)

Analysts said the KOSPI is expected to continue gains next week even after the past three-session gain that increased valuation pressure.

Estimate-beating earnings in the first-quarter and rosy outlook for second quarter earnings are expected to reduce the valuation pressure on local stocks, they said.

"The first-quarter earnings report season is close to finish, and investors' attention is now on the second-quarter performance, which seems bright at this point," NH Investment & Securities analyst Kim Young-hwan said.

"The biggest stock risk would be the (U.S.) tapering issue, but the general consensus is that it is too early for the U.S. Federal Reserve to consider it," he added.

In the January-March period, investors hailed surprise earnings by top exporters of chips, petrochemicals and autos.

Home appliance and machinery also performed strong, boosted by support for infrastructure spending and new homes in the U.S., one of South Korea's two largest trading partners along with China.

Last month, local exports jumped 41.1 percent on-year, expanding at the fastest pace in a decade.

jwc@yna.co.kr
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