Seoul shares expected to move higher on big events next week

By Yonhap
  • Published : Oct 13, 2018 - 10:26
  • Updated : Oct 13, 2018 - 11:03

South Korean stocks will likely move upward next week as big global events may ease the uncertainties that have bothered the financial market, analysts said Saturday.

The benchmark Korea Composite Stock Price Index closed at 2,161.85 on Friday, down 105.67 points, or 4.7 percent, from the previous week.

The electronic display board in KEB Hana Bank's dealing room shows KOSPI closing at 2,161.85 on Friday. (Yonhap)

Seoul shares started weaker on the first day of the week on a foreign selling binge. Investors were worried about lingering trade tensions between the United States and China and a faster-than-expected US rate hike schedule.

After being closed on Tuesday for Hangeul Day, the market was overwhelmed on Wednesday by the International Monetary Fund's report that lowered its growth outlook for South Korea to 2.8 percent from 3 percent. The organization also cut its forecast on the world economy by 0.2 percent point to 3.7 percent.

The gloomy outlook sparked a stock rout throughout the world, with the US exchange suffering from a near 4 percent plunge on Wednesday.

On Thursday, South Korean stocks dived 4.44 percent to an 18-month low to mark the largest daily drop since Sept. 23, 2011.

But some good news from the US and China helped improve investors' sentiment on Friday and end KOSPI's eight-straight-session losing streak.

Next week, the South Korean stock market is expected to enjoy a positive atmosphere coming from Washington and Brussels.

The US Treasury Department will release its half-yearly currency report next Monday, probably without China on the list.

Also, media reports say the European Union will conclude a Brexit deal at its summit meeting in Brussels.

"Those two events will erase two big uncertainties that have long clouded the financial market," said analyst Seo Sang-young from Kiwoom Securities Co. "Also, we will see key economic data from the US and China."

Data on US industrial production and retail sales are due next week, while China will release its third quarter growth results.