S. Korean bourse to stay choppy on U.S. rate woes

The South Korean stock market is expected to remain choppy next week as investors avoid risky assets amid uncertainties regarding the timing of a looming U.S. rate hike, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 1,942.85 points on Friday, down 2.66 percent from a week earlier.

This week, Seoul shares began lower on Monday after the U.S. Federal Open Market Committee decided to maintain its key rate whilst adding that it will keep watch on the ongoing growth slump in emerging markets.

The KOSPI managed to trade higher on two of the five sessions this week, as auto shares received a boost from German automaker Volkswagen's emissions cheating scandal that emerged this week, but the index was unable to pull itself up higher due to continued global economic woes.

Analysts said the trend will likely continue next week as investors remain anxious amid a lack of concrete hints at when the U.S. Fed may go ahead with the long-awaited rate hike.

"Even after the Chuseok holiday, volatility is likely to persist amid uncertainties of the schedules of a U.S. rate increase, all the while more investors are preferring to avoid investing in risky assets," said Kim Jung-hwan, an analyst at KDB Daewoo Securities Co.

Although the Fed Chair Janet Yellen has suggested that a rate increase is in line for later this year, she has yet to give out any more hints regarding the exact timing.

The Seoul bourse will be open starting Wednesday next week after Chuseok, a major harvest holiday here that falls on Sunday this year.

Foreign investors dumped off a net 1.04 trillion won (US$872.48 million) this week, while retail investors bought more shares than they sold at 1.22 trillion won.  Institutions scooped up a net 371.44 billion won.

Medical shares and logistics firms were among the major leaders this week, while steel and metals, electronics, and fiber businesses lost ground.(Yonhap)