Shares to stay stagnant on delayed fiscal cliff talks

The South Korean stock market is likely to remain stagnant this week as investors are expected to take a wait-and-see stance on the U.S. fiscal cliff issue, analysts said Saturday.

The benchmark Korea Composite Stock Price Index finished at 1,911.33 this week, up 2.1 percent from the previous week.

Earlier last week, the KOSPI moved up as U.S. lawmakers and President Barack Obama successfully began talks on the U.S. fiscal issue, while rising hopes for financial aid to Greece also gave a boost to investors’ sentiment.

However, it declined when the eurozone and the International Monetary Fund failed to establish common grounds on the Greece bailout deal.

Shares rebounded later in the week, following improved economic data from the eurozone and China, as well as eased political tension in the Middle East.

The South Korean tech behemoth Samsung Electronics, which ended at all-time high 1,437,000 won ($1,323) on Friday, also added to the gains in other technology firms, analysts said.

Weekly foreign net-buying totaled 55 billion won, while institutions scooped up 430 billion won worth of shares. Retail investors, on the other hand, offloaded shares worth 520 billion won.

Analysts said the KOSPI is likely to remain stagnant until measures for the fiscal cliff issue start to shape up.

“Shares will be traded in a limited range, as we do not anticipate the U.S. will come up with a final solution soon,” said Han Chi-hwan, an analyst at KDB Daewoo Securities Co.

U.S. lawmakers are set to resume talks on the issue starting Nov. 26, as Congress recessed for the Thanksgiving holiday.

Tech firms and textile companies were the biggest gainers this week, adding 6.8 percent and 2.8 percent, respectively. In contrast, medical and pharmaceutical firms lost ground. (Yonhap News)