South Korean stocks are forecast to move upward next week, analysts said Saturday, with the Greek prime minister's latest victory in a confidence vote and an upcoming meeting among European financial ministers likely to embolden investor sentiment.
The benchmark Korea Composite Stock Price Index (KOSPI) closed at 1,928.41 on Friday, down 1.07 points, or 0.06 percent, from one week ago.
Reports about MF Global Holdings' filing for bankruptcy protection and an announcement from Greek Prime Minister George Papandreou that the troubled country will hold a referendum on the European Union-led bailout package spooked investors earlier in the week.
Adding to the grim market outlook was LG Electronics' move to raise 1.06 trillion won worth of capital through new share sales, which sent stocks of the world's No. 3 mobile phone maker and its affiliated companies into tailspin.
The Seoul bourse, however, recouped most of its losses on Friday, jumping more than 3 percent as Greece's decision to cancel the referendum and the European Central Bank's move to cut key interest rates relieved investors.
Analysts said that the KOSPI is forecast to move upward in the coming week as Papandreou's Cabinet narrowly won a confidence vote in the Greek parliament early Saturday morning, bolstering the outlook for the rescue package and likely helping Greece avert a fall into a default.
"Because the KOSPI went through some corrections since it has added around 300 points from its lowest level, investors may expect the index to gain ground," said Lee Seung-woo, an analyst at Daewoo Securities Co.
Investors are keen on the results of impending events that may provide directions for the global financial markets and how well global leaders can coordinate to contain the Greek crisis.
Financial ministers of the European Union are scheduled to hold a two-day meeting starting on Monday, and Ben Bernanke, chairman of the Federal Reserve, is slated to give a speech later in the week.
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