[Stock Preview] Seoul shares to see limited gains this week
South Korean stocks are expected to gather upward momentum, albeit limited, this week on cautious optimism over eased geopolitical woes and dovish messages from the US central bank, analysts said over the weekend.
The benchmark Kospi closed at 2,177.05 points Friday, down 1.26 percent from a week earlier.
With the Seoul bourse closed Feb. 4 through Feb. 6 for the Lunar New Year holidays, the index finished nearly flat on Feb. 7 before recording big losses in the following session on renewed concerns over a lack of clear-cut headway on easing global trade frictions.
US President Donald Trump said on Feb. 7 that he would not meet Chinese President Xi Jinping for a trade deal before the March 1 deadline. News reports that Trump could ban Chinese telecom equipment from American wireless networks also served as a negative factor.
Amid such lingering uncertainties, the benchmark index is not expected to pull off meaningful gains in the coming week, but the planned talks between the US and North Korea and the widely anticipated reassurance of dovish steps by the US central bank could add some upward momentum, according to analysts.
“High-level talks between Washington and Beijing slated for next week could lead to some positive developments over their trade stand-off,” Seo Sang-young, a researcher at Kiwoom Securities, said.
“The planned second summit between Trump and North Korean leader Kim Jong-un in Vietnam is also likely to lower geopolitical concerns on the Korean Peninsula, one of the major sources of the so-called Korean discount among foreign investors,” said Kim Byung-yeon, an analyst at NH Investment & Securities.
By Park Ga-young and newswires (email@example.com)