Seoul shares forecast to maintain upward march next week

SEOUL, March 12 (Yonhap) -- South Korean shares are expected to continue their upward march next week as demand for risky assets remain firm following the European Central Bank (ECB)'s bolder-than-expected easing steps, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 1,971.41 points on Friday, up 0.8 percent from a week ago.

Foreign investors scooped up 880 billion won (US$737 million) worth of local stocks this week, while institutional investors sold over 1 trillion won.

The country's stock market started weak this week as investors took to the sidelines waiting for the results of the ECB's policy meeting and the Federal Open Market Committee (FOMC)'s rate-setting meeting slated for next week.

On Thursday, the ECB unveiled measures that beat market expectations by cutting all its interest rates and expanding the scope of its bond-buying program, helping boost investor sentiment here.

"Investors' appetite for risky assets will grow following the ECB's actions, but weak economic fundamentals may be a drag on a continued rise in the local stock," said Koh Seung-hee, an analyst at KDB Daewoo Securities Co.

The analyst said the FOMC is expected to keep its policy rate on hold next week, and may signal rate hikes in the future will be gradual.

China is also set to release key economic data such as retail sales and industrial activity for February, which are widely expected to have remained weak, according to the analyst.

Food-related shares and machinery stocks were among the winners by rising 4.3 percent and 3.2 percent each, while insurers and textile makers traded bearish this week by moving down 2.3 percent and 2.1 percent.

sam@yna.co.kr
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