Seoul stocks to undergo adjustment weighed down by eurozone woes

Published : May 19, 2012 - 14:33 Updated : May 19, 2012 - 15:27

South Korean stocks are expected to undergo further adjustments next week, weighed down by mounting eurozone uncertainties and their impact on the global economy,local analysts said Saturday.

   The country's key stock index, the KOSPI, closed at 1,782.46 on
Friday, a drop of 7.03 percent or 134.67 points from a week
earlier, mainly due to fears that Greece may exit the eurozone and
concerns that the continent's fiscal woes have started to spill
over into the banking sector.

   The plunge is significant because it comes on the heels of a
72.02 point loss tallied during trading in the second week of May,
caused by anti-austerity election results in France and Greece.

   The KOSPI tends to react to overseas developments affecting
trade and investments, with the significant presence of foreign
investors contributing to its volatility when the market loses ground.

   "There is a pressing need to calm the market that panicked
during the course of the week," said Lee Seung-woo, an analyst at
Daewoo Securities. He said, however, that because of the sharp drop
in local stock prices, it may not fall as steeply in the new week.

    Others said that the current situation taking place in Europe
will not be resolved until mid June when Athens plans to hold
another election that will determine its future in the 17-member eurozone.

   Many analysts said there is a need to take a wait-and-see
stance for the time being with investors advised not to increase
their stock holdings.

   Besides the developments taking place in Europe, market
watchers said housing sales and durable goods orders in the United
States to be released next week could influence the local stock
market.(Yonhap News)