Shares expected to climb as Italy moves to stabilize fiscal woes

South Korean stocks are forecast to gain ground next week as Italy moves to stabilize its fiscal woes, analysts here said Saturday.

Stock market analysts said the move by Italian lawmakers to reform its pension plan and dispose of state assets will send the right message to investors and help reduce the European country’s debt that stands at 120 percent of its gross domestic product.

The effort follows similar action taken by Greece, Portugal and Spain to ward off disasters that could destabilize the global economy.

Reflecting overall uncertainties, Seoul’s benchmark Korea Composite Stock Price Index fell 4.9 percent from a week earlier to close at 1,863.45 on Friday.

The KOSPI had plunged by more than 100 points during the week’s trading at one point to the low 1,800 range, before making a comeback on the strength of net buying by private investors.

“Next week’s market is expected to benefit from a technical rally as worries surrounding Italy are eased,” an expert said. He added that the possible gains in the U.S. manufacturing index will help numbers, although this may be offset by a dip in retail figures for October compared to the previous month.

Other experts such as Lee Seung-woo, an analyst at Daewoo Securities Co., cautioned that measures being taken by European economies do not address fundamental problems, hinting that any gains may be limited in nature. 

(Yonhap News)