Seoul Stocks Expected to Face Volatility Next Week Due to Omicron Fear

South Korean stocks are expected to continue to face volatility next week as investors sit on the sidelines amid the spread of the omicron strain of the coronavirus.

Korea’s benchmark stock price index (KOSPI) closed at 2,968.33 points on Friday, up 1.09% from 2,936.44 points a week ago.

KOSPI plunged Monday and Tuesday following the first confirmed cases of the omicron variant of COVID-19 in South Korea and other countries, stoking fears that the world’s major economies will toughen their lockdown measures to contain the pandemic.

The key stock index subsequently rebounded largely on the rush of foreign investors to pick up oversold chip and IT stocks.

Analysts said stock market volatility could increase next week, citing uncertainties over renewed fear of COVID-19.

Investors are closely monitoring the death rate and resistance to the existing COVID-19 vaccine.

“Global equity markets should remain sensitive to daily news about the omicron wave,” said Kim Young-hwan, analyst at NH Investment & Securities.

The emergence of the potentially more transmissible variant is a setback for South Korea’s efforts to return to normal with a gradual easing of virus restrictions under the “living with COVID-19” program that began the month latest.

The government on Friday decided to limit private gatherings to six people in the capital and eight in other areas for four weeks, starting next week.

“Investors appear worried that the increased foreclosure measures on global economies could affect production,” Kim added. (Yonhap)