Seoul shares likely to gain ground this week

The Korean stock market is forecast to maintain its upward momentum this week, but the growth pace may be slow due to lingering concerns about the global recovery, analysts said.

The benchmark KOSPI wrapped up last week at 2,100.24, down 0.53 percent from a week earlier.

The KOSPI lost ground earlier last week as weaker U.S. economic data and the eurozone debt crisis raised concerns about the global recovery, sparking the run of foreign sell-offs. Foreigners sold a net 3.7 trillion won ($3.41 billion) worth of local stocks for the 10th straight session on Wednesday.

But the index, which declined to the 2,030 level at one point, rebounded to the 2,100 level as foreign investors returned to the Seoul market on Thursday.

Analysts said once the KOSPI gains momentum, it is expected to sustain its upward trend, but the growth pace is not likely to be steep.

“There is a high chance that volatility that shook the Seoul market is expected to ease up,” said Lee Seung-woo, an analyst at Daewoo Securities. “But to diversify their portfolios, it would be better for investors to reduce the weight of automakers and chemical makers, which have led the market’s gains.”

The global financial markets are closely watching the development in debt-ridden peripheral countries in the eurozone amid cautions that Greece may face debt restructuring.

This week, Korea plans to unveil its April industrial output numbers on Tuesday and consumer prices figure for May on Wednesday. 

(Yonhap News)