The South Korean stock market is likely to be stagnant this week as uncertainties over the U.S. fiscal cliff continue to dent investor sentiment, analysts said.

The benchmark Korea Composite Stock Price Index closed at 1,860.83 this week, down 2.29 percent from the previous week, as shares lost ground across the board.

Foreign investors went on a selling spree, unloading a net 520 billion won ($476 million) on the main bourse, with retail investors scooping up a net 80 billion won. Institutions purchased a net 370 billion won.

The KOSPI hovered below the 1,900-point earlier in the week despite improved economic data in the U.S., as investors took a wait-and-see stance on the fiscal cliff issue, which is scheduled to be discussed after the Thanksgiving holiday.

The weaker third quarter gross domestic growth reported by the eurozone as well as the volatile global political condition following Israel’s attack on the Gaza Strip also came as a major drag on the local stock market, analysts said.

Analysts said the local stock market will remain flat this week, as the lack of upward momentum weighed down investor sentiment for the recovery.

“There are no anticipated issues for this week that can push up the market,” said Han Chi-hwan, an analyst at KDB Daewoo Securities Co.

Market watchers said even if Greece receives financial aid this week, it will only have a limited impact on the local stock market as the eurozone fiscal crisis is no longer a core variable.

Most shares traded in negative terrain last week, with medical firms falling 5.9 percent, while brokerage houses and logistics firms shed 5.4 percent and 4.2 percent, respectively. (Yonhap News)