South Korea’s stock market turned bearish Friday at the news of the eurozone’s overnight decision to extend its stimulus program until at least March 2017.

But the impact of the measure, which largely fell short of investors’ expectations, will remain limited in Korea as its economy is more dependent on the incoming rise of the U.S. Fed’s rate and the resulting exchange rate fluctuations than the immediate rate cut in Europe, observers said.

The benchmark Korea Composite Stock Price Index lost 14.35 points or 0.72 percentage, and fell to 1,979.72 during the first 15 minutes of trading on Friday.

The downturn reflected the European Central Bank’s overnight decision to extend the current quantitative easing program until March 2017 and to cut its key interest rate deeper into the negative, by 0.1 percentage point to minus 0.3 percent from 0.2 percent.

The market appeared largely underwhelmed, as it was expecting the central bank to ramp up its asset purchasing program and to pull down the key rate to the lowest-ever minus 0.4 percent.

The ECB has kept its key rate in the minus territory and purchased 60 billion euros of bonds every month, aiming to encourage banks to lend money to businesses and households rather than store cash.

Despite such efforts, Europe’s economy continued to remain sluggish, with the inflation rate standing at a mere 0.1 percent in November, falling far below ECB’s target of almost 2 percent.

The stalled situation pushed the market to call for more stimulus, especially as the United States is expected to raise its key rate as early as within the month.

“Santa Mario did not turn into the Grinch but his long-awaited early Christmas afternoon left many market participants disappointed like small kids who receive less and smaller presents than expected on Christmas eve,” Carsten Brzeski, chief economist for ING DiBa, told the AFP.

The disappointment of the European market spread onto the global economy as well.

“Since October, ECB President Mario Draghi has repeatedly hinted at extending quantitative easing, which led the financial market to brace itself for more drastic changes,” said Kim Jae-hong, researcher at Shinyoung Securities.

“But ECB’s recent decision definitely fell short of the market’s expectations and this was reflected in the domestic stock market.”

The negative impact, however, will be limited and temporary, according to market observers.

“The domestic stock market may have fluctuated right after the ECB’s decision but will soon return its attention to a more critical issue, which is the imminent U.S. rate hike,” said Park Seok-hyun, researcher at Eugene Investment & Securities.

“The stock market, along with the exchange rate, is likely to fluctuate within a given range rather than dip further.”

By Bae Hyun-jung & news reports (tellme@heraldcorp.com)