Oil prices and Eurozone to affect S.Korean shares

Rising oil prices and worries over Eurozone debt problems will affect South Korean shares next week, analysts said Saturday. South Korean news agency (Yonhap) reported that the Korea Composite Stock Price Index (KOSPI) got off to a strong start, after China lowered the reserve ratio for its banks. The benchmark KOSPI ended this week at 2,019.89, down 0.17 percent or 3.58 points from a week earlier. The Korean index which once exceeded 2,040 points, lost ground later as investors unloaded their holdings to take profit from the short-term upswings and worries about a default by Greece. The Eurozone's debt problems are expected to remain as a major determining factor, though finance ministers in the region recently decided to offer a second package of rescue money to debt-ridden Greece, analysts added. Oil prices were also a drag on the stock markets as higher energy costs are feared to slow the nation's overall economy recovery. South Korea, the world's fifth-largest oil purchaser, depends on imports for most ofits oil needs. "As the outlooks for oil prices are not that optimistic, it would be difficult for the stock market to stage a strong gain next week," said Lee Seung-woo, an analyst at Daewoo Securities Co. . As of Thursday, Dubai crude oil was trading at US$121.57 per barrel. Oil prices have been on the rise mainly due to increasing demand from emerging countries as China and India. Analysts said that investors will keep paying close attention to which direction international oil prices go.