The South Korean stock market is expected to climb and stay above the 2,000-point level this week on a series of prompts at home and abroad, analysts said.

The benchmark Korea Composite Stock Price Index lost 22.21 points from the previous week to close at 1,994.96 points Friday as investors went profit-hunting after a heated rally.

After closing at a yearly high the week before, the KOSPI sank below the 2,000-point level in 10 sessions on Monday on institutional selling.

On Wednesday, it soared back to the second-highest point of the year on upbeat U.S. economic data and possible stimulus measures by the European Central Bank.

Investors retreated again due to a slowdown in South Korean industrial output in April and still-sluggish U.S. economic growth, dragging down the index to below the 2,000-point line.

Weekly foreign buying came to a net 280 billion won ($274.3 million), while institutions sold a net 220 billion won. Retail investors offloaded a net 42 billion won.

Analysts said the KOSPI is expected to hover above the 2,000 mark as foreign investors are likely to continue their buying streak next week amid a string of key events at home and abroad.

An ECB meeting scheduled for Thursday will likely decide on further stimulus measures as its chief Mario Draghi hinted at a rate cut.

“The ECB’s rate cut move will lead to a weak euro and encourage European investors to bet on risky assets in emerging markets. It will be the same for the South Korean market,” said Jennifer Lee, an analyst from KDB Daewoo Securities Co.

Investors are also waiting for China’s manufacturing index to be released on Sunday as an indicator of whether the world’s second-largest economy is on a recovery track.

“Foreign inflow has been strongly affected by China’s economic situation and financial stimulus policies by the U.S. and Europe. We can see the results next week,” the analyst said.

The South Korean market will be closed on Wednesday for the local elections and on Friday for Memorial Day. (Yonhap)