Seoul shares forecast to face correction next week

SEOUL, July 8 (Yonhap) -- South Korean shares are expected to come under selling pressure next week as investors attempt to cash in recent gains to take a breather, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 2,379.87 points on Friday, down from 2,391.79 points a week ago, as falling oil prices, coupled with rising geo-political tension stemming from North Korea's ICBM launch, sapped investor sentiment.

This week, the local stock market started a tad higher as investors continued to scoop up some market heavyweights sending the index to near an all-time high. But a decline in oil prices together with Pyongyang's continued provocation, scared investors away from making bets on local stocks.

Next week, the local stock market will face a further correction as central banks around the globe are sending signals that they will start heading towards a tightening mode, and there are no clear market-moving stocks except IT shares.

"But a correction, if any, would be offset by rosy earnings outlook and an improvement in economic conditions," said Oh Tae-dong, an analyst at NH Investment & Securities.

"The local stock market is still undervalued given its value compared to earnings outlook," the analyst said.

sam@yna.co.kr
(END)