South Korean stocks crawled 0.13 percent up Thursday as investors sat on the sidelines to watch progress in U.S. fiscal cliff negotiations, analysts said. The local currency lost ground against the U.S. dollar.

The benchmark Korea Composite Stock Price Index gained 2.58 points to 1,949.62. Trading volume was light at 335 million shares worth 4.6 trillion won (US$4.3 billion) with decliners outpacing advancers 427 to 385.

“The U.S. fiscal cliff widely dominates the market, while there are no other big issues to boost investor sentiment,” said Lee Jae-man, an analyst at Tongyang Securities Inc.

Still, the main index has recently shown a moderate upward move as investors expect the U.S. policymakers to reach an agreement before the end of the year to avoid the worst-case scenario, he said.

The KOSPI remained below the 1,900-point level in the beginning of November but steadily rose to reach nearly 1,950 in early December.

“Nevertheless, investors tend to remain cautious at a time when the world’s largest economy may fall into a deep recession if the budget talks end up in failure.”

Foreigners scooped up a net 216.9 billion won worth of local shares, extending their buying streak for six sessions in a row.

Shares closed in mixed territory. Banks were bullish, with Woori Finance Holdings, the country’s biggest financial group by asset, rising 2.48 percent to 10,350 won, and Shinhan Financial Group jumping 3.22 percent to 35,250 won.

Top shipyard Hyundai Heavy Industries advanced 3.08 percent to 217,500 won and Daewoo Shipbuilding & Marine Engineering added 1.25 percent to 24,350 won. (Yonhap News)