South Korean stocks are expected to move upwards this week, with investors awaiting the result of the European Union’s summit scheduled for later in the week, analysts said.

The benchmark Korea Composite Stock Price Index closed at 1,933.26 last week, down 3 percent from a week earlier.

It sank into negative territory as the International Monetary Fund provided a gloomier outlook for South Korea, while a lackluster forecast on third-quarter performances of large caps in the U.S. weighed on investors’ sentiment.

Investors’ confidence also worsened on South Korea’s central bank slashing its 2012 economic growth estimate by a larger-than-expected margin to 2.4 percent. The Bank of Korea lowered its estimate as exports are feared to cool amid the global economic slowdown.

Shares moved flat on Friday as the protracted downward move in the local stock market this week led to more investors seeking price adjustments, analysts said.

Foreigners scooped up a net 100 billion won ($90 million) of local shares on the main bourse, with retail investors purchasing a net 1.2 trillion won. Institutions offloaded a net 690 billion won last week.

Analysts forecast that the key index will likely move upwards next week, as investors anticipate European leaders may come up with a breakthrough for fixing the worsening debt crisis in Spain and Greece.

“The local stock market will stay stationary, if not rebound this week, buoyed by hopes on adjustment and policies,” said Lee Seung-woo, an analyst at KDB Daewoo Securities.

Tech firms and securities were the biggest losers this week, both retreating 4.8 percent, followed by steelmakers falling 3.7 percent. In contrast, medical firms and food producers gathered ground. (Yonhap News)