Seoul stocks expected to face volatility next week due to virus concerns
Electronic panels from a trading room at Hana Bank in Seoul show that the benchmark Korean equity price index (KOSPI) closed at 3,217.95 on Friday, down 34.73 points, or 1.0. 07%, compared to the close of the previous session. (Yonhap)
Korea’s benchmark stock price index (KOSPI) closed at 3,217.95 points on Friday, down 1.94% from last week.
The key stock index started this week with gains, thanks to the optimistic outlook for corporate earnings for the April-June period.
But stock prices have plunged in the past three sessions, largely due to the surge in new coronavirus cases in the country which has prompted authorities to implement semi-lockdown measures in the greater Seoul.
This week, foreign investors poured net 1.95 trillion won ($ 17 billion) into the main exchange, while retail investors bought 3.5 trillion won. The institutions discharged a net amount of 1.64 trillion won.
South Korea added 1,316 new daily COVID-19 cases on Friday, marking the highest number since the first confirmed case on January 1.
Starting Monday, private gatherings of three or more people will be banned after 6 p.m., with bars, sports games and in-person classes closed.
Analysts expected local financial markets to face another week of volatility amid uncertainties related to the virus amid the bullish earnings outlook.
“Economic indicators and corporate earnings (forecasts) are promising as the COVID-19 risk has emerged as a reef,” said Kim Young-hwan, analyst at NH Investment & Securities.
“A temporary adjustment and relatively high volatility can weigh on stock prices, but the virus is unlikely to cause another economic crash,” he added.
Next week, South Korea’s unemployment data for June will be released on Wednesday.
The Bank of Korea (BOK) is due to hold its next monetary meeting on Thursday. China’s second-quarter gross domestic product (GDP) and U.S. industrial and commercial production will be released on the same day. (Yonhap)