Stocks likely to face correction this week

South Korean stocks are predicted to undergo correction this week as they had risen too much in the short term last week, analysts said Saturday.

The benchmark Korea Composite Stock Price Index finished at 1,995.04 on Friday, up 1.92 percent from a week earlier.

The KOSPI moved in a tight range earlier this week as investors sat on their hands ahead of the U.S. Federal Reserve’s policy-setting Federal Open Market Committee meeting.

North Korea’s long-range rocket launch in the middle of the week also had little impact on the local market.

On Thursday, the South Korean stocks’ benchmark breached the 2,000-level after the Federal Reserve’s decision to purchase additional state bonds worth $45 billion a month starting in January in a bid to bolster the local economy.

However, investors’ jitters over the stalled U.S. fiscal cliff talks trimmed the mid-week’s rise.

“The KOSPI’s short-term sharp rise will inevitably cause investors to take a breather next week,” said Lee Seung-woo, an analyst at KDB Daewoo Securities Co., encouraging investors to hunt for bargains.

With investor sentiment dented by the U.S. fiscal cliff issue, the KOSPI could move on the U.S. economic indicators such as the consumer confidence index and data on the country’s property market that are scheduled to be out next week, the analyst said. (Yonhap News)