South Korean stocks are forecast to set their directions according to results of the European Central Bank’s rate-setting meeting next week, analysts said Saturday.

The benchmark Korea Composite Stock Price Index closed on Friday at 1,944.56, up 1.98 percent, or 37.81 points, from a week ago.

Analysts said the local stock market is expected to move on results of the ECB’s rate-setting meeting slated to be held this week amid growing voices for an interest rate cut in the eurozone.

However, it will be difficult for the ECB to cut its benchmark rate as Germany has been in opposition to the move, they said, adding that chances are high that new monetary policy will be introduced due to the overall poor economic conditions in the zone.

“Investors should pay attention to the fact that investors from European countries went on a buying spree on the Seoul bourse in the past when the European countries introduce new monetary policies,” said Han Chi-hwan, an analyst at KDB Daewoo Securities Co.

Analysts also said that hopes of second-quarter earnings by tech firms are predicted to prop up the local market this week.

Though major local companies saw their second-quarter earnings remain bearish, the fact that their earnings were not way below market expectations will also have a positive impact on the market, they said. (Yonhap News)