South Korean stocks are likely to undergo volatility next week due to uncertainty about the US Federal Reserve's monetary policy meeting and the latest spike in COVID-19 cases, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 3,010.23 points Friday, up 1.41 percent from 2,968.33 points a week ago.

The key stock index gained for the seventh straight session Thursday amid expectations of chip price hikes and eased concerns about the new omicron variant.

The KOSPI snapped its winning streak Friday, however, as investors worried the latest spike in virus infections may hurt the economic recovery.

Market volatility is expected to heighten next week ahead of the Fed's policy meeting, analysts said.

In a two-day policy meeting set for Tuesday and Wednesday, the Fed is widely expected to announce a plan to speed up the tapering of its bond-purchasing program.

"Considering that the U.S. central bank has kept its hawkish stance toward inflation, the Fed is likely to announce the plan to quicken the withdrawal of its stimulus program and make comments about its potential rate hike move for next year," said Kiwoom Securities analyst Ahn Yae-ha.

The market consensus is that the Fed may complete the tapering by March next year, faster than its previous plan to do so by June 2022.

Lingering concerns about the omicron variant could also weigh on the stock market as more study about the strain is under way.

Next week, investors will also pay attention to key economic data, including U.S. retail sales and China's industrial output, to gauge the pace of the global economic recovery. (Yonhap)