KOSPI to drift in tight range next week

SEOUL, Sept. 5 (Yonhap) -- South Korea's stock market is expected to drift in a
tight range next week with no clear catalyst to push the market higher, analysts
said Saturday.
The benchmark Korea Composite Stock Price Index (KOSPI) closed this week at
1,608.90, up 0.96 percent from the previous week.
The Seoul bourse started weaker, swayed by falls in the Chinese market, analysts
said. That provoked worries about a possible correction, and the market swung
alternately between gains and losses throughout the week.
Attention is likely to turn next week to South Korea's central bank, which is
scheduled to hold its monthly rate-setting meeting on Thursday. The Bank of Korea
froze its key interest rate for the sixth straight month in August.
Analysts also expect price swings during a quadruple-witching day on Thursday.
Quadruple-witching refers to the simultaneous expiration of stock index futures,
stock index options, stock options and single stock futures.
They expect that market activity will be subdued until the earnings season arrives.
"The recent rally was based on the better-than-expected earnings reports in the
second quarter. Investors now want to see how the results will turn out in the
third quarter," said Kim Sung-bong, a researcher at Samsung Securities. "The
KOSPI will move within narrow range for a short-term period."
Short-covering is likely in sectors that were beaten down last week, but Kim
warned against blind optimism.
"The market will still hinge on tech and auto maker shares," he stressed.
Lee Seung-woo, a researcher at Daewoo Securities, agreed that tech and auto
stocks should be watched for the overall market direction.
"The two key drivers in the market were a buying spree by foreign investors and
the strength of large-cap stocks, mainly tech exporters and auto makers," Lee
said. "However, those two drivers have started to move in the opposite
direction."
ygkim@yna.co.kr
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