Seoul shares likely to gain ground this week

South Korean stocks are expected to move upward this week, as an upcoming central bank meeting and a summit in Europe drive investor expectations for more actions to tackle the eurozone crisis, analysts said.

The benchmark KOSPI jumped 7.86 percent, or 139.64 points, to 1,916.04 on Friday from a week earlier, as investors scooped up risky assets after global central banks said they will lower dollar-funding costs.

A bank reserve ratio cut by China and strong employment reports from U.S. private sectors also helped boost investor sentiment, driving the KOSPI’s highest weekly gain in one year.

Analysts said investors are likely to bet on risky assets before the European Central Bank’s rate-setting meeting and the European Union summit, with hopes that the results of these meetings would keep the eurozone turmoil from worsening.

They added that local financial markets could remain volatile this week as futures and options expire on Thursday, the same day that Bank of Korea will hold a monthly rate-setting meeting.

The BOK is also scheduled to release the third-quarter gross domestic product data on Tuesday.

“It is recommended to take a more cautious approach and wait until these reports are released,” said Lee Seung-woo, an analyst at Daewoo Securities. 

(Yonhap News)