S. Korean stocks to remain volatile next week on renewed economic woes

SEOUL, Jan. 17 (Yonhap) -- South Korean stocks are expected to remain volatile next week as investor jitters will intensify for a possible repeat of global financial turbulence and bleaker-than-expected corporate earnings, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed this week at
1,135.2, down 45.76 points, or 3.87 percent, from the previous week, hit by
lackluster economic indicators at home and abroad.
Adding to the concerns, Moody's Investors Service put 10 major local banks on a
review for possible ratings downgrade on Thursday, reflecting tightening overseas
funding conditions.
Foreigners and institutions led the overall downswing by dumping net 550 billion
won (US$405 million) and 730 billion won throughout this week. Retailers remained
a sole net buyer, picking up 1.2 trillion won.
As the protracted financial instability is taking its toll on the real part of
the economy, focus is now being moved on to how detrimental its impact will be to
major companies which will announce their fourth-quarter earnings.
"With volatility feared to intensify, things are not favorable either in the
supply and demand aspect in the market," said Kim Jung-hyun, an analyst at
Goodmorning Shinhan Securities. "Investors need to be defensive rather than
aggressive, narrowing their focus on shares."
Analysts echo the bleak market conditions but the inauguration of U.S.
President-elect Barack Obama slated for Tuesday (local time) will provide a boost
by lifting uncertainties over the new administration's economic policies.
"Jitters are growing over financial risks but the main focus will shift on to how
Obama's inauguration will impact the overall market mood, which will determine
the market's direction," said Lee Seung-woo, an analyst at Daewoo Securities.
kokobj@yna.co.kr
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