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

The benchmark Korea Composite Stock Price Index finished at 1,904.41 last week, down 0.74 percent from the previous week, as steep losses in key automakers weighed on the main index.

The KOSPI plunged to the low 1,900-level as shares of Hyundai Motor and Kia Motors tumbled following their fuel efficiency scandal in the United States. Investors also remained cautious ahead of the U.S. presidential election.

Shares rebounded following U.S. President Barack Obama’s re-election, but the fiscal issue in the world’s largest economy and a revision on eurozone growth outlook again weighed on the KOSPI later in the week.

Weekly foreign net-selling totaled 298.9 billion won, while retailers scooped up 388.2 billion won worth of shares.

Institutional investors also offloaded shares worth 122 billion won.

Analysts said the KOSPI is likely to remain stagnant until measures for the fiscal cliff issue start to shape up. U.S. lawmakers are set to begin talks on the issue starting Nov. 26 as the U.S. Congress will be closed for a Thanksgiving Holiday.

“Concerns over the U.S. fiscal cliff will likely weigh on the KOSPI. But since the KOSPI is already hovering in the 1,900 threshold, it seems additional adjustments won’t be big,” said Han Chi-hwan, an analyst at KDB Daewoo Securities Co.

Meanwhile, analysts said China’s power shift is likely to have a minimal impact on the local stock market as the country’s policy and power structures have largely been established. (Yonhap News)