Seoul stocks forecast to gain ground next week on easing euro-zone debt fears

SEOUL, July 23 (Yonhap) -- South Korean stocks are forecast to turn higher next week as easing concerns about sovereign defaults in the euro zone and the United States revive investment sentiment, analysts said Saturday. The benchmark Korea Composite Stock Price Index (KOSPI) ended last week at 2,171.23, up 26.03 points, or 1.21 percent, from the previous week. The main index had lost ground in early-week trades, but bounced back later as European countries vowed support for Greece and U.S. tech giant Apple Inc.'s brisk second-quarter earnings brought back market confidence. On Thursday evening, leaders of France and Germany agreed to come up with a second bailout plan for Greece to prevent its debt crisis from spreading to Spain or Italy. Receding external risks are likely to continue driving up local stocks next week, with foreign investors expected to turn back from their net selling mode, analysts said. Big-cap shares, which suffered the most from the global jitters, will likely be the largest gainers next week, they added. "Rather than mid or small shares that had withstood a recent bear run, big-cap shares and the KOSPI's major players seem to be an effective pick," said Lee Seung-woo, an analysts at Daewoo Securities. The analysts, however, warned that large amounts of economic data due next week and second-quarter earnings reports of local firms could cast some uncertainties over next week's market mood.