SEOUL (Thomson Financial) - South Korean shares are expected to open lower
on Friday as the record-breaking run of oil prices stokes fears of inflation,
which could crimp consumption and slow economic growth.
The price of crude oil swept past $124 a barrel in after-hours trading on
the New York Mercantile Exchange on Thursday.
The Dow rose 0.4 percent to 12,866.78, aided by energy stocks.
Investors are likely to stay on the sidelines ahead of a three-day holiday,
with the market closed on Monday for Buddha's Birthday.
Exporters may find some support from a weaker won, which has been driven by
oil refineries' strong demand for U.S. dollars in order to fund their ballooning
oil import bills.
South Korea is the world's fifth largest oil importer.
"Unstoppable oil price hikes should weigh on sentiment but as higher oil
prices tend to strengthen the U.S. dollar, exporters will likely hold on to
their gains," said Hana Daetoo Securities analyst Seo Dong-pil.
Seo said electronics and car makers will be the major beneficiaries of a
weaker won.
The KOSPI closed down 6.01 points or 0.3 percent at 1,848.00 on Thursday
after the Bank of Korea defied market expectations for a rate cut and kept
interest rates unchanged at 5 percent, citing higher inflation risks.
($1 = 1,049.60 won)
eunkyung.seo@thomsonreuters.com
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