Kospi expected to stay near 2,000, Greece willing

Korean shares are expected to trade in a tight range this week while trying to stay above the 2,000 point mark, depending on how the euro zone debt crisis unfolds, analysts said.

The benchmark Kospi wrapped up this week at 2,023.47, up 1.5 percent from a week earlier.

The Kospi had a brisk start to the week as the Greek government’s approval of an austerity bill helped quell investor jitters over a possible default there.

Hopes for a bailout for debt-ridden Greece and successful debt sales by Italy and Spain helped the key stock index’s rise above the 2,020 level.

But the Kospi retreated to the 1,990 mark later in the week, due to a delay in the decision to rescue Greece and divided opinion over a third round of quantitative easing among policy makers at the Federal Reserve.

Analysts said that the Kospi is expected to test the 2,000 point mark this week as investors are likely to focus on the development of solutions to Greece’s debt woes.

“This week, the Seoul bourse will continue to try to stay above the 2,000 level, depending on external factors,” said Lee Seung-woo, an analyst at Daewoo Securities.

Market watchers said that foreign investors are likely to continue their buying spree this week, which will give the Kospi upward momentum. Offshore investors snapped up a net 648 billion won ($575.2 million) worth of local stocks on the main bourse last week.

Meanwhile, the junior market for the first time in six months recovered above 540. The tech-heavy Kosdaq closed the week at 540.14 after gaining 2.15 points compared to a week earlier, thanks to institutional investors.

Yonhap