South Korea's main stock market is likely to continue its uptrend next week due to an expectation of the U.S. economy achieving a soft landing and solid corporate earnings, analysts said Saturday.
The benchmark Korea Composite Stock Price Index (KOSPI) finished the week at 1,364.24, up 1.16 percent from the previous week, as Seoul shares rebounded despite lingering concerns over North Korea's nuclear test.
"The local stock market is expected to get a boost from a possible uptrend in U.S. stock market," said Kim Joong-hyun, an analyst at Goodmorning Shinhan Securities Co.
The likelihood of another rate freeze by the U.S. Federal Reserve is expected to drive American stocks higher, strengthening the market belief that the Fed's credit-tightening campaign has come to an end.
The speculation is strong that the Fed will keep its key interest rate steady at 5.25 percent on Wednesday at a meeting of its policy-setting panel due to falling oil prices and reduced inflationary pressure, analysts said. If the rate freeze is decided, it will be the third in a row at which the rate has remained unchanged following 17 consecutive increases.
"Recent U.S. economic indicators show eased concerns over increasing inflationary pressure and rising expectations for the world's biggest economy's soft landing," he added.
But gains in the domestic stock market may be limited as there is still lingering woes over the North's nuclear test.
"Investors are keeping their eyes on North Korea's development," said Yoo Jung-ryul, an analyst at Daetoo Investment & Securities Co. The local stock market is likely to run into resistance at 1,380 even if it rises further, he added.
Seoul, Oct. 21 (Yonhap News)
Seoul bourse expected to get boost from rise on Wall Street next week |
