Seoul stocks to continue rise on earnings hope next week

By Chung Joo-won

SEOUL, April 17 (Yonhap) — South Korean stocks are likely to maintain their upward momentum next week as expectations of estimate-beating first-quarter corporate earnings run high, although investors may be attempted to cash in recent gains.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 3,198.62 points on Friday, up 2.13 percent from a week before.

The index gained for the five sessions since Monday, with brokerages predicting the index may stay above the 3,200-point threshold despite the increased valuation pressure.

Foreigners bought a net 273 billion won and retail investors purchased 878 billion won on the local main bourse this week, spurred by robust economic data, such as exports and upbeat earnings of major firms in the United States.

Such rosy speculations are expected to boost foreign purchase of local stocks next week, particularly IT, secondary battery and steel-related shares, said NH Investment & Securities analyst Noh Dong-kil.

“As of April 14, about 80 percent of the companies listed on the S&P 500 reported earnings surprise,” he said, adding “Foreigners will be key drivers of the KOSPI’s directions next week.”

On the downside, a flare-up in COVID-19 cases, along with rising selling pressure following a week-long rally, could add pressure on the local financial market, brokerage analysts said.

This week, health authorities said they may adopt stronger social distancing measures if daily COVID-19 cases remain high.

As of South Korea’s daily new coronavirus cases stayed in the 600s for the second straight day Friday, with authorities emphasizing that the country’s virus fight is at a critical juncture of bracing for resurgence of the COVID-19 pandemic.