Stock Market Today

South Korean stocks are headed for a downward correction this week due to a lack of buying interest, analysts said.

Foreign investors snapped their buying spree towards the end of last week, dragging the market lower. An absence of influential factors means the market will likely continue along that path, the analysts said.

The benchmark Korea Composite Stock Price Index (KOSPI) lost 0.48 per cent or 8.23 points from the previous week to close at 1,691.48 on Friday due to foreign and institutional sell-offs.

In middle of the week, the key index breached the 1,700-mark for the first time in 15 months, helped by the Asian Development Bank’s upgrade of its outlook of the South Korean economy for 2009.

The ADB predicted Tuesday the Korean economy will shrink 2 per cent this year, revising upward its earlier growth projection of negative 3 per cent.

The direction of the market this week will depend largely on offshore investors, analysts said.

“Profit-taking by foreign investors may be realized sometime next week, but it will be limited,” said Kim Joong-hyun, an analyst at Goodmorning Shinhan Securities Co.

Lee Joo-ho, an analyst at Woori Investment Securities Co., expected the market to fall further next week as bearish U.S. markets could spook overseas investors

Last week, foreign investors bought a net 3.69 trillion won (US$3.1 billion) worth of shares listed on the Seoul bourse, while foreign net purchases of local shares fell to 600 billion won this week.