Korean stocks are expected to lose momentum next week, weighed down by the pessimistic U.S. economic index and credit downgrades of eurozone countries, analysts said Saturday.
The benchmark KOSPI inched up 0.8 percent to close at 1,964.83 on Friday on strong foreign buying buoyed by positive corporate earnings and the U.S. Fed’s low-rate pledge. The key index has spiked nearly 100 points over the previous two weeks.
World’s largest memory chip maker Samsung Electronics posted 13.7 trillion won ($12.2 billion) in net profit and 165 trillion won in sales for 2011. Its shares reached an all-time high of 1,125,000 won on the Seoul bourse on Friday.
Foreign investors led the rally last week by purchasing 1.9 trillion won worth of local shares, continuing a 12-session buying streak.
Analysts, however, said the stock market will likely face downward pressure this week on worse-than-expected U.S. economic data and the lingering European woes.
The U.S. quarterly report showed that the economy expanded 2.8 percent during the fourth quarter of last year from the previous period, lower than a market forecast of 3 percent.
The country’s employment data to be released next Friday is likely to fail to push global stock markets upward, analysts added.
Global credit appraiser Fitch Ratings knocked down the credit ratings of five eurozone countries by one or two notches, citing their financial risks of high borrowing costs.
Lee Seung-woo, an analyst from Daewoo Securities Co., said the external uncertainties will affect the Korean stock market this week, cooling down the two week-long sharp rally.
“It is recommended that investors take profit or reduce their stock holdings. And they should put off plans to buy stocks,” said Lee.
But he said there will be no sharp drop in the stock prices as Europe is expected to make efforts to avoid a worst-case scenario.
(Yonhap News)
