South Korean stocks are expected to keep their upward momentum on positive leads at home and abroad, with the key index likely to reach the 2,200-point level by year-end, analysts said Monday.
The benchmark Korea Composite Stock Price Index (KOSPI) finished at 2,100.20 on Friday, surpassing the 2,100 mark for the first time in about one month. KOSPI gathered further ground on Monday, closing up 1.43 percent at 2,130.24.
Analysts attributed the recent recovery in the country's main stock market to a possible Sino-American deal to resolve their drawn-out trade war and rising expectations of a rebound in South Korean corporate earnings in the fourth quarter.
"South Korean and overseas stocks market have recently been on a roll thanks to the possibility of the U.S.-Chinese trade dispute easing," Lee Chang-mok, chief researcher at NH Investment & Securities Co., said. "KOSPI could rise as high as 2,200 by the end of the year."
Cho Yong-jun of Hana Financial Investment Co. chimed in. "The domestic bourse will likely get a boost from expectations that South Korean corporate performances may bottom out this year and take a turn for the better next year thanks to a small-scale trade deal between Washington and Beijing."
"South Korean stocks will likely continue to rise until the first quarter of next year, with KOSPI reaching the 2,200 mark by year-end and 2,450 next year."
The United States and China said Friday that both sides had made progress in resolving a near 16-month-long trade spat that has been a major drag on global trade and the world economy.
Combined with the latest U.S. rate cut, a possible trade deal between the world's two largest economies is widely predicted to give a fillip to the world economy.
Late last month, the U.S. Federal Reserve slashed its benchmark interest rate by 25 basis points to a range of 1.5 percent to 1.75 percent to help bolster the world's No. 1 economy.
Market watchers also said marked improvements in key U.S and Chinese economic indicators, including a gain in U.S. non-farm jobs and China's better business confidence, have added to hopes of a recovery in the global economy.
In addition, anticipation for improved corporate earnings in Asia's fourth-largest economy have fueled the recent stock market rally, they added.
According to financial market tracker FnGuide, the market-consensus operating income for 250 major listed companies in South Korea is estimated at 29.99 trillion won (US$25.8 billion) for the fourth quarter of this year, up 5 percent from a year earlier. (Yonhap)