Seoul shares remain volatile before rate-setting meeting

SEOUL, Dec. 6 (Yonhap) -- South Korean stocks are expected to move in a tight range as investors remain on the sideline ahead of the central bank's rate-setting meeting, analysts said Saturday.
The benchmark Korea Composite Stock Price Index (KOSPI) plunged 47.94 points, or
4.45 percent, this week to end at 1,028.13. The index fell below the 1,000-point
mark at one point but rebounded immediately on bargain hunting.
Market volatility grew as investors worry that the economy is fast lapsing into a
slowdown, hit by the fallout from the global financial turmoil. Companies and
banks are suffering from a worsening credit crunch, calling for government help.
Global efforts are intensifying to shield the world economy from recession, with
central banks of advanced countries lowering interest rates and governments
announcing economic stimulus measures.
"Such a credit crunch and recession factors have already been reflected in local
stocks," said Kim Jung-hyun, an analyst at Goodmorning Shinhan Securities.
"Market volatility will last for the time being but the downward move is slowly
losing its momentum."
Investors will turn their attention to a rate-setting meeting to be held on
Thursday by the Bank of Korea. The central bank is widely expected to cut its key
interest rate by at least 0.25 percentage point after trimming the rate by 125
basis points to 4.0 percent since October.
Options will expire this week, which will serve as another factor that will
determine market movements.
"Direction will depend on whether the central bank's rate decision satisfies
expectations and option expiry doesn't augment volatility," said Lee Seung-woo,
an analyst at Daewoo Securities.
kokobj@yna.co.kr
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