Seoul bourse likely to trade in tight range next week

SEOUL, May 30 (Yonhap) -- The South Korean stock market is expected to trade in a
narrow range next week as investors will likely digest the lingering impact of
North Korea's nuclear test and prospects of an economic recovery, analysts said
Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed this week at
1,395.89, down 0.56 percent from the previous week.
The Seoul bourse was largely unscathed by North Korea's announcement of another
nuclear experiment and firing of several short-range missiles as most investors
shrugged off the fallout, but lingering geopolitical risks increased volatility
in the market, analysts said.
They said that the Korean market is forecast to trade in a tight range next week
because although geopolitical risks stemming from North Korea have been factored
into the market, the bourse lacks strong momentum for an upturn.
"Although foreigners are buying local stocks, it does not seem that the momentum
for the market's additional gains is strong," said Kwon Yang-il, an analyst at
Woori Investment & Securities Co. "The Seoul bourse is likely to trade in a
narrow range amid mixed sentiment over hope for an economic recovery and market
uneasiness."
South Korea's consumer and business sentiments are improving amid cautious
optimism that the Korean economy is approaching its bottom. Korean manufacturers'
sentiment for June rose to the highest since October as stabilizing currency and
improving economic indicators fueled corporate optimism.
But data reflecting the real economy still remains sluggish as companies and
consumers are reluctant to spend amid a cloudy economic outlook.
They said market investors will also focus on a possible bankruptcy filing by
ailing U.S. carmaker General Motors Corp.
"As investors have already factored a possible bankruptcy into the market, it
will likely have a limited impact on the Seoul equity market," said Kwak
Joong-bo, an analyst at Hana Daetoo Securities Co.
Starting Monday, a ban on short-selling of Korea's non-financial stocks will be
lifted, but many analysts said it will not have a big impact on the market.
sooyeon@yna.co.kr
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