South Korea's main stock market is likely to remain in a tight range next week due to lingering concerns over a slowing global economy and falls in the U.S. bourses, analysts said Saturday. The benchmark Korea Composite Stock Price Index (KOSPI) finished this week at 1,434.36, up 0.9 percent from the previous week, as Seoul shares rebounded, helped by improved economic data.
South Korea's export growth accelerated in November, fueled by strong overseas demand for LCD panels, semiconductors and ships, a government report said Friday. Overseas shipments surged an annual 19.8 percent to US$30.9 billion in the month, up from $28 billion from the previous month, it said.
But analysts said concerns over a slowing global economy are likely to weigh on the South Korean stock market in the coming week.
"The local stock market is expected to move in a narrow range as there are still worries over a global economic slowdown," said Shin Dong-min, an analyst at Daewoo Securities Co.
The U.S. Institute for Supply Management said Friday its manufacturing index unexpectedly fell below 50, the weakest reading in more than three years which has raised concerns over a slowdown in the U.S. manufacturing industry.
But analysts said the slim possibility of a rate hike by the Bank of Korea (BOK) next week is expected to ease concerns that a further interest rate increase would lead to economic slowdown.
Last week, the central bank raised the reserve ratio on demand deposits to 7 percent from the current 5 percent for the first time in almost 16 years to reduce the money supply and help stabilize real estate prices.
The rise in the reserve ratio is likely to lead to a freeze of the benchmark call rate, or the interest on overnight inter-bank loans, analysts said.
BOK policymakers are scheduled to meet on Thursday to set the central bank's call rate target for December.
Seoul, Dec. 2 (Yonhap News)
Seoul bourse expected to remain flat next week: analysts |
