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Seoul stocks likely to move in tight box next week: analysts

All News 10:00 October 23, 2021

By Chung Joo-won

SEOUL, Oct. 23 (Yonhap) -- South Korean stocks are likely to move in a tight box next week as investors weigh the potential impacts of the U.S. Federal Reserve's tapering and hopes of strong corporate earnings, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 3,006.16 points Friday, down 0.3 percent from a week ago.

The KOSPI moved in a relatively tight range this week, largely on easing virus concerns and stabilization of the local currency market.

South Korea reported 1,440 new daily cases Friday in a downward trend in its coronavirus infections, as its strong vaccination push seems to be helping prevent the spread of the coronavirus from spinning out of control.

The local currency closed at 1,177.1 won against the U.S. dollar Friday, up 0.1 won from the previous session's close, after spiking to the 1,200-won level last week.

Seoul stocks likely to move in tight box next week: analysts - 1

In the coming week, analysts expected the tussle between inflation worries and earnings hopes to continue in the local financial markets. The U.S. Fed has so far adhered to its plan to start rolling back its stimulus in November.

"We are seeing both the expectations of fat corporate earnings (in the third quarter) and the wariness about the cost-push inflation," said NH Investment & Securities analyst Kim Young-hwan.

"The KOSPI is expected to fluctuate around the 3,000-point threshold, with the U.S. Fed set to begin tapering its stimulus in two weeks," he added.

Analysts also said expectations of the "living with COVID-19" scheme is likely to boost investors' appetite for risk.

Under the scheme, COVID-19 will be treated as an infectious respiratory disease, like seasonal influenza, and most distancing measures will be eased. Authorities are testing the waters before they officially set the D-day for the campaign's launch.

Next week, a flurry of third-quarter earnings reports by KOSPI heavyweights are coming up.

On Monday, POSCO, LG Chem and Woori Financial Group will publish their earnings.

SK hynix, Shinhan Financial Group and Hyundai Motor are set to report Tuesday. Kia and Samsung C&T will announce their earnings Wednesday.

KOSPI top cap Samsung Electronics, Hyundai Steel, Hyundai Mobis, Hyundai Heavy Industries Group will release their earnings report Thursday.


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