Seoul stocks likely to remain subdued next week on rising bond yield woes
By Chung Joo-won
SEOUL, Feb. 20 (Yonhap) -- South Korean stocks are likely to face volatile trading next week following this week's choppy trading, as concerns about a U.S. Treasury yields hike may increase foreign investors' selling appetite for local stocks.
The benchmark Korea Composite Stock Price Index (KOSPI) closed at 3,107.62 points Friday, up 0.23 percent from a week ago.
Foreigners bought local stocks early this week on positive developments of the U.S. virus relief package and eased COVID-19 lockdown schemes in South Korea and Europe.
However, as indicators of global economic rebound increased speculations of faster-than-expected yield hikes, foreign investors turned to sellers.
The benchmark 10-year U.S. Treasury bond yields touched the highest level since February last year.
Analysts expected that concerns about U.S. yield hikes are likely to linger longer in the markets.
"Local stocks are facing correction on institutions' computer-aided selling and foreigners' rush for profit-taking," NH Investment & Securities analyst Noh Dong-kil said.
The selling pressure is likely to remain in the face of the increased volatility in the KOSPI's global peers, sensitive to hikes in Treasury yields and inflation rates, he said.
This week, foreigners sold a net 718 billion won on the main bourse, while individuals bought 3.8 trillion won. Institutions offloaded a net 3.1 trillion won.
jwc@yna.co.kr
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