SEOUL, Jan. 22 (Korea Bizwire) — South Korean stocks are forecast to move in a tight range as investors will likely assume a wait-and-see strategy ahead of the Lunar New Year holiday, analysts said Saturday.
The benchmark Korea Composite Stock Price Index (KOSPI) closed at 2,834.29 on Friday, marking the lowest closing price since December 2020, sharply down from 2,921.92 points a week earlier.
The country’s stock market started lower on Monday, dropping to its lowest point in almost seven weeks as investors dumped holdings on concerns about mounting inflationary pressure.
The KOSPI extended it losing streak to a fifth consecutive session on Wednesday before rebounding shortly on Thursday on investors’ moves to buy oversold stocks.
Analysts said volatility in the local bourse rose this week ahead of the U.S. Federal Reserve meeting and the public subscription for initial public offering of electric vehicle battery maker LG Energy Solution, which ended on Wednesday. The firm’s listing is set for Jan. 27.
Concerns are mounting that the Federal Reserve will aggressively move to raise rates this year and investors are awaiting the U.S. central bank’s policy meeting scheduled for next week.
For the incoming week, trading volume is expected to be light as South Korea begins its five-day Lunar New Year holiday. The local markets will be closed between Jan. 31 and Feb. 2
NH Investment & Securities analyst Kim Young-hwan said investors are likely take to the sidelines ahead of the holiday.
Kim forecast the main stock index to trade between 2,800 and 2,950 points in the coming week.