Shares likely to stay on sidelines this week

Korean stocks will likely move sideways this week, with investors eyeing the result of the European Central Bank’s monetary policy meeting scheduled for later in the week, analysts said.

The benchmark Korea Composite Stock Price Index finished at 1,905.12 this week, down 0.8 percent from the previous week.

It sank into negative territory earlier in the week after top-cap Samsung Electronics nosedived 7 percent on its patent lawsuit defeat to Apple Inc. The KOSPI rebounded after expectations of economic stimulus measures again heightened ahead of the U.S. Federal Reserve chief Ben Bernanke’s speech on Friday.

However, as hopes for another bond purchase by the Fed faded, the KOSPI fell near the 1,900 mark, with investors refusing to make risky bets.

Foreigners went on a selling spree, unloading a net 130 billion won ($114.6 million) on the main bourse, with retail investors selling off a net 200 billion won. Institutions offloaded a net 280 billion won.

Analysts forecast that the key index will likely move upwards, as ECB chief Mario Draghi indicated earlier he could take more actions to prevent a further slowdown of the eurozone, but it will be limited as investors are likely to remain wary ahead of the U.S. rate-setting meeting in mid-September.

“Given the scenario that foreigners will come back, we can expect a bullish market led by tech and auto shares,” said Han Chi-hwan, an analyst at KDB Daewoo Securities Co.

Tech firms were biggest losers this week, retreating 3.9 percent, followed by machineries with 1.9 percent and brokerages with 1.7 percent. In contrast, medical, textile and shipping-related stocks gathered ground. (Yonhap News)