S. Korean stocks expected to keep upward momentum next week

SEOUL, Jan. 2 (Yonhap) -- South Korea's stocks are expected to maintain their
upward momentum next week, mostly driven by advances in the tech, auto and steel
industries amid improving economic conditions, analysts said Saturday.

The country's key stock index, the KOSPI, gained 0.43 points this week to close
at 1,682.77 on Thursday after rising to nearly the 1,700-mark amid a fresh
liquidity crisis for the Kumho Group. On Friday, the bourse was closed ahead of
the New Year holiday.
"Given that the nation's stock markets endured the impact from the liquidity
crisis well, the upward move will likely continue into this year for the time
being," said Kwak Joong-bo, an analyst at Hana Daetoo Securities. He cited tech,
auto and steel shares as bright spots that will continue to drive the overall
rise in the local stock markets next week.
On Wednesday, two key units of the Kumho Group group -- Kumho Industrial Co. and
Kumho Tire Co. -- were put under creditor-led debt restructuring as the group
faces a cash shortage after a series of mergers and acquisitions.
Kwak pointed out that uncertainties might put a drag on the market mood as
investors will determine the direction by examining Kumho-related issues and
outlooks for corporate earnings for the fourth quarter.
Some also worry that stocks might get off to a weak start Monday, as Wall Street
lost sharp ground on the last trading day of 2009. U.S. stocks usually provide a
glimpse into the direction of most Asian markets the next trading day.
Another factor that could increase market volatility is Friday's monetary policy
meeting at the nation's central bank, which will weigh whether to increase the
nation's key interest rate.
Despite such uncertainties, most analysts say that the upward momentum will not
likely be undermined for some time, buttressed by optimism that the economy is
making a faster-than-expected turnaround from last year's slump.
The government earlier predicted that the nation could avoid what many had feared
would be the first contraction in more than a decade in 2009 by growing 0.2
percent before expanding 5 percent this year.
kokobj@yna.co.kr
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