South Korea's stock market is expected to undergo a correction in the coming week on profit taking, an analyst said Friday. "I expect profit-taking next week following weeks of gains, with no positive elements that will help the market maintain its growth momentum," said Dongbu Securities analyst Lim Dong-Min.
Expected poor quarterly earnings to be released by US companies in the coming week are likely to offset solid earnings by major South Korean firms such as Samsung Electronics and Hyundai Motor, he said. "Furthermore, foreign investors are selling shares in the belief that the benchmark index will stay below 1,800 points for a while," Lim said.
For the week to April 18, the KOSPI index lost 7.81 points or 0.4 percent to finish at 1,771.90. "It's a relief to see the dust from the credit crisis settling. But worries about a US recession and the possibility of further interest rate hikes in China remain a big drag," said Good morning Shinhan Securities analyst Kim Joong-Hyun.
For the third time this year, China ordered banks to raise the amount of funds they park with the central bank to combat inflation. Analysts say lending rates may be the next to rise.
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