Seoul stocks likely to remain stagnant next week

SEOUL, Dec. 19 (Yonhap) -- South Korean stocks are expected to remain stagnant
next week as a rebounding U.S. dollar dents foreign investors' risk appetite,
analyst said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) finished the week at
1,647.04, down 9.86 points, or 0.6 percent from the previous week when the index
registered its biggest weekly advance since March.
The retreat came mainly as foreign investors, the key driver of the Seoul bourse,
renewed their risk-averse sentiment after Standard & Poor's cut Greece's debt
rating and the U.S. dollar rebounded against global key currencies.
Analysts predict the global upturn in the dollar will continue to drive foreign
investors to seek safe-heaven assets and away from emerging market equities.
Sluggish foreign purchases, coupled with a cut in trading volumes ahead of the
year-end holidays, may leave the local stock market stagnant next week, they
said.
Still, gains in small-and-medium caps are likely to continue in the coming week
as investors shift their focus to smaller firms following recent sharp rises in
large-cap shares.
"Investors are advised to focus on the moves by institutional investors next
week, as their purchase of small-and-medium caps is expected to lead the market,"
Kim Jung-Hyun, an analyst at Shinhan Investment, said.
pbr@yna.co.kr
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