By Chung Joo-won
SEOUL, Nov. 28 (Yonhap) — South Korean stocks are likely to move in a tight range next week, as the benchmark index’s recent rally may prod investors to cash in part of gains.
Despite a surge in new daily COVID-19 cases, the benchmark Korea Composite Stock Price Index (KOSPI) closed at 2,633.45 points Friday, up 3.13 percent from a week ago.
Foreigners’ extended buying spree helped boost the market rally for the past several days. They bought a net 2 trillion won worth of local stocks on the main bourse this week, while institutions sold a net 1.95 trillion won, according to data from the Korea Exchange (KRX).
Analysts said foreign buying was fueled by the progress in COVID-19 vaccine development and South Korea’s faster-than-expected recovery from the pandemic.
The Bank of Korea revised up this year’s economic growth outlook to 1.1 percent contraction, up from the previous forecast of a 1.3 percent retreat. Next year’s forecast was also raised to 3 percent expansion, up from the previous 2.8 percent growth forecast.
In the coming week, the KOSPI’s uptick momentum is likely to be pegged by valuation pressure, analysts said.
The KOSPI set new all-time highs every session this week except Wednesday, leaving investors questioning the longevity of the November rally.
“KOSPI’s further hike would require more ammunition, such as promising earnings estimates for 2022,” NH Investment & Securities analyst Kim Young-hwan said.
Investors will have to digest key data, including South Korea’s gross domestic production and November exports data.
China’s Caixin manufacturing Purchasing Managers Index (PMI) and the U.S. Institute for Supply and Management (ISM) manufacturing index will be published on Tuesday (Korea time).