South Korean stocks are expected to fall because of global financial jitters and the reeling local currency, analysts said on Friday. "Downside risks are great in the absence of upward momentum. Investors are advised to remain bearish," Lee Yun-Hak of Woori Investment and Securities told AFP.
Anxieties over struggling US banks, and feared defaults by Eastern European countries are weighing heavily on the market, and the weaker won is also deterring foreign investors, he said.
"It is difficult to say with any confidence that the KOSPI will stay above 1,000 points," Lee said. The KOSPI index closed Friday on 1,063.03 points, down 2.92 points from a week earlier when it finished at 1,065.95.
Other analysts also said the market is unlikely to rally next week.
"Without the removal of risk stemming from the global financial sector, it will be hard to expect any meaningful rebound in the KOSPI," Lee Woo-Hyun, an analyst at KTB Securitiees, told Dow Jones Newswires. "Programme trading driven by foreigners' speculative futures trading is expected to rattle the cash market amid an absence of momentum for a while."
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