South Korean stocks are likely to face growing volatility next week as fears over a weakening yen grip investors amid a lack of upward momentum, analysts said Saturday.
The benchmark Korea Composite Stock Price Index (KOSPI) closed at 1,939.87 on Friday, down 24.56 points from 1,964.43 the previous week.
Seoul shares started the week on a weak note after the Bank of Japan's surprise move for additional monetary easing spurred concerns about the weakening yen and pummeled shares of exporters that compete with Japanese manufacturers.
Uncertainties over the U.S. midterm elections and worries of slowing growth in China pushed the KOSPI further lower later in the week.
Analysts forecast currency concerns to continue to weigh on the KOSPI, with no momentum for an upward push in the market.
On Friday, the local currency ended at 1,093.7 won against the greenback, skidding for a seventh straight session.
"While there may be a technical rebound, there seems to be no momentum that can help turn around market sentiment for the time being," said Lim Dong-lak, an analyst at Hanyang Securities.
"While the European Central Bank's implication of additional stimulus and upbeat sales forecast for the upcoming end-year shopping season are normally positive factors, they are not powerful at the moment with so much interest focused on currency," he said.
Some analysts, however, said the Bank of Korea's upcoming rate-setting meeting on Thursday may help ease currency fears, depending on the central bank governor's remarks.
Noh Aram of KDB Daewoo Securities wrote in a report that developments in trade talks between Seoul and Beijing may benefit shares of auto parts makers, cosmetics manufacturers and retailers.
South Korean President Park Geun-hye and Chinese President Xi Jinping are expected to hold a bilateral summit next week on the sidelines of the Asia-Pacific Economics Cooperation (APEC) gathering. (Yonhap)
