South Korean stocks are expected to rebound slightly over the holiday-shortened trading sessions next week, led by bargain hunting from the recent slump, analysts said Saturday.

The benchmark Korea Composite Stock Price Index closed at 2,061.49 points on Friday, down 0.38 percent from the previous week.

This week, investors took to the sidelines out of concerns over the US Federal Reserve's interest rate hike and global economic growth.

While the Fed's fourth rate raise of the year had been widely expected, its less dovish outlook on monetary policy than investors had anticipated dampened investor sentiment here.

A possible US government shutdown over border wall funding also put downward pressure on the index on Friday.

Telecom and bio shares were among the top gainers, while steel and construction remained in negative terrain.

Analysts expected lower volatility in the coming week as major markets, including the United States, Japan and Germany, close two sessions for the Christmas holiday.

"Investors are expected to pay attention to undervalued stocks and high-dividend yield shares ahead of the last trading day of the year," Kim Byung-yeon, an analyst at NH Investment & Securities, said. "Possibilities of easing trade tension between the US and China could also help boost market sentiment."

The ex-dividend date is set for Thursday, one day before the last trading day for the main Kospi bourse. (Yonhap)