South Korean stocks are projected to trend lower in the first week of the new year, weighed down by nagging concerns over the eurozone debt crisis, analysts said Saturday.
The benchmark KOSPI fell 2.2 percent last week to close at 1,825.74 on Friday as continued worries over Europe’s problem outweighed positive economic data from the United States.
Reports showed that U.S. consumer confidence and orders for U.S. durable goods and home sales increased, but they were not strong enough to convince investors to bet on risky assets.
Italy’s better-than-expected debt sale also failed to give a boost to investor sentiment, which largely remained tepid on worries Standard & Poor’s may downgrade the sovereign credit ratings of eurozone countries early this year.
Meanwhile, investors cashed out following the last dividend payments before the end of the year, adding on to KOSPI’s downward pressure.
Analysts said improving U.S. economic data and China’s possible reserve rate cut may boost the KOSPI but warned investors to stay cautious amid ongoing market uncertainties.
“Despite a string of positive U.S. economic data, investors should refrain from market optimism,” said Kim Jung-hoon, an analyst at Korea Investment & Securities Co.
“Disappointment over the U.S. economic recovery may spread once the seasonal rebound in consumer sentiment fades.”
(Yonhap News)
