South Korean stocks are likely to remain shackled next week as unrelenting political unrest in the Middle East is expected to keep fueling worries over oil price gains, analysts said Saturday.
The benchmark Korea Composite Stock Price Index (KOSPI) ended
the week at 1,995.54, falling 49.14 points, or 2.45 percent, from a
week earlier as the unceasing protests in the Arab world are feared
to result in increases in global crude costs.
Shares lost ground across every industry, with electronics
makers taking the hardest dive due to pessimism over their
first-quarter earnings results.
Foreign investors fled the local stock market, net selling a
combined 2.17 trillion won (US$1.9 billion) of domestic shares
during the week, compared with their net buying of 278.57 billion
won in the previous week.
Violence continued to dampen investor sentiment as Libyan
leader Muammar Qaddafi stepped up military forces to control rebels
trying to topple the four-decades-old regime in the capital, Tripoli.
Analysts said the massive deadly earthquake that rattled Japan
on Friday may also add to externally driven market uncertainties
and further dent investor sentiment.
"The market is currently driven by external forces so the focus
should be placed on political conditions in the Middle East and
changes in oil prices," Lee Seung-woo, analyst at Daewoo
Securities, said. "Ongoing Middle Eastern political protests over
the weekend and oil price moves may determine the market mood for a
while," he said.
He said the market will undergo a period of volatile trades, but may not be severely affected.
"The factors will likely lead to market corrections but they
will start to lose downward momentum as the local market has been
factoring them in," Woori Investment & Securities analyst Lee
Hyun-joo said. (Yonhap News)