SEOUL, South Korean stocks are expected to gain momentum next week, as investor sentiment will be buoyed by eased uncertainty about the U.S. monetary policy, analysts said Saturday.
The benchmark Korea Composite Stock Price Index (KOSPI) closed at 3,017.73 points Friday, little changed from 3,010.23 points a week ago.
The key stock index retreated on Monday and Tuesday as investors took to the sidelines ahead of the U.S. Federal Reserve’s policy meeting.
But local stocks rebounded for three straight sessions to Friday, as the outcome of the Fed’s meeting was largely in line with market expectations.
After a two-day policy meeting, the Fed announced plans to double the pace of its bond purchases and signaled at three rate hikes next year.
Analysts said the Korean stock market is expected to gain momentum next week, citing eased uncertainty about the Fed’s policy.
“The Fed’s announcement was in line with the market consensus. Eased uncertainty about the Fed’s policy is expected to help the KOSPI set for a year-end rally,” said Hyundai Motor Securities analyst Kim Joong-won.
Analysts also expected the supply-chain bottleneck, a key economic fallout from the pandemic, would likely ease down the road.
“If the U.S. decides not to impose further lockdowns in production and transport against the spread of the omicron variant, the supply chain bottleneck is likely to eventually ease down and corporate earnings will rise,” said NH Investment & Securities analyst Kim Byung-yeon.
Analysts said the KOSPI’s performance is likely to pick up once the supply bottleneck eases.
Next week, South Korea’s finance ministry plans to unveil its 2022 economic policy directions. The country’s data on exports and imports in the first 20 days of December will be released Tuesday.
Source: Yonhap News Agency