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Seoul shares expected to move in tight range next week

Nov. 26, 2011 - 11:11 By

South Korean shares are expected to move in a tight range next week as fiscal debt problems in Europe and the United States will continue to weigh on investor sentiment, analysts said Saturday.

The benchmark Korea Composite Stock Price Index closed at 1,776.40, down 3.3 percent from last week. This week's close marked the fourth consecutive week the index has declined.

The index earlier gained ground despite the U.S. Congressional committee's failure to identify ways to cut the budget deficit as Moody's Investors Service said it will not downgrade the United States' sovereign credit rating.

The KOSPI quickly fell below the 1,800 mark following a report that the growth of the United States' gross domestic product in the third quarter was revised from an earlier estimate of 2.5 percent to 2 percent. Investor sentiment lost further ground following reports of a possible downgrade of the credit ratings of Portugal and Hungary.

Foreign investors sold a net 1.45 trillion won ($1.24 billion) worth of stocks here this week with institutional investors also selling a net 570 billion won worth of stocks.

Individuals purchased shares worth 820 billion won in net value.

The direction of local shares next week will largely depend on conditions in the United States and Europe, analysts said.

"Small technical gains may be possible, but conditions are still too uncertain for aggressive investment," said Lee Seung-woo, an analyst at Daewoo Securities Co. "Investors are advised to aim for small, short-term gains." (Yonhap News)