SEOUL, March 27 (Yonhap) — South Korean stocks are likely to fluctuate in a tight range next week, as optimism for an economic rebound may be balanced against global uncertainties over a potential U.S. tax hike and Chinese fiscal tapering, analysts said Saturday.
The benchmark Korea Composite Stock Price Index (KOSPI) closed at 3,041.01 points Friday, almost unchanged from 3,039.53 a week ago.
Stocks traded choppy this week, hovering around the 3,000-point threshold, as investor sentiment was swayed by concerns over the spreading new coronavirus outbreaks in Europe amid hopes for a quick economic recovery.
The KOSPI retreated for five consecutive sessions until Wednesday, particularly as a strong lockdown in Europe decreased investor sentiment for risks.
But the key stock index rebounded in the last two sessions, as expanding vaccination plans at home and abroad increased optimism of better earnings for local companies.
Local stocks are also expected to trade in a tighter band next week due to rising global uncertainties, analysts said.
They said local stocks would fluctuate as the U.S. indicated a potential tax increase, with China indicating possibilities that quicker-than-expected recovery from the pandemic could accelerate the tapering of its COVID-19 monetary policies.
“Ironically, the stock markets seem to be hailing bad news, such as resurgence in the COVID-19 outbreaks and the Sino-American political tensions, because they want the governments to step in to help,” NH Investment & Securities analyst Kim Young-hwan said.
Last week, foreigners sold a net 1.29 trillion won (US$ 1.14 billion) worth of stocks on the main bourse, while individuals bought 2.25 trillion won. Institutions offloaded a net 1.01 trillion won during the cited period.