The South Korean stock market is expected to edge up next week once financial uncertainties are eased after the U.S. monetary policy-setting meeting slated for Dec. 17-18, analysts said Saturday.
The benchmark Korea Composite Stock Price Index fell 1.2 percent from the previous week to close at 1,962.91 Friday.
Earlier this week, Seoul shares lost ground as investors took a wait-and-see approach amid the weak growth momentum in the market, sparked by the rising concerns over a potential tapering of U.S. quantitative easing.
Investors continued to remain silent ahead of the U.S. policy-setting Federal Open Market Committee meeting, which could give a better idea of when the central bank will commence cutting its economic stimulus.
Investors also remained concerned as the U.S. Democratic and Republican parties reached the fiscal 2014 budget plan, a positive progress that may induce the Federal Reserve to start the tapering sooner than expected.
Monetary easing moves by an advanced country usually cause investors to set their sights on riskier emerging markets, while a reduction leads them to relocate their investments.
Analysts said the local stock market is anticipated to gather ground next week as the FOMC is not expected to change course soon.
“The FOMC is unlikely to start a cut in quantitative easing as improved jobs and housing data are not enough to curb woes over the country’s economy,” said Han Chi-hwan, a researcher at KDB Daewoo Securities Co.
“The central bank will also take a wait-and-see approach ahead of the inauguration of its new head,” Han added. Janet Yellen, the successor to Ben Bernanke, is scheduled to take office in January.
Weekly foreign selling came to 960 billion won ($911.59 million) while institutions scooped up a net 880 billion won and retail investors bought a net 330 billion won.
Shares mostly lost ground across the board this week, with builders and chemical firms falling 2.6 percent and 2.4 percent, respectively. Technology firms also lost 1.5 percent, while banks edged up 1.3 percent. (Yonhap News)
