South Korean stocks will be influence by Greece’s parliamentary elections that are expected to shape the future of the eurozone and the global economy, local analysts said Saturday.

The country’s key stock index, the KOSPI, closed at 1,854.16 points after a choppy session on Friday, a drop of 13.32 points from Thursday but a gain of 22.52 points from a week earlier.

The solid weekly gains were helped by a surge in stock prices in chemical, steel and machinery and construction after they had not done well in recent weeks.

The increase also marks the fourth time in a row that the local bourse managed to pull off a gain compared to the week before.

Analysts said volatility in the market was caused by expectations that the U.S. Federal Reserve is moving to announce fresh stimulus programs to revive the world’s No. 1 economy, which helped restore investor confidence. However, predictions that a party that is opposed to austerity measures may win Sunday’s elections in Greece triggered losses.

Disappointment and uncertainties surrounding Spain’s banking sector bailout limited overall gains.

“This week’s stocks prices will be affected by Greece’s election results and what actions are taken by the European Union and the United States,” said Lee Seung-woo, an analyst at Daewoo Securities.

He said that because the market will move up and down depending on actions taken by countries in the 17-member eurozone and Washington, the overall volatility in the KOSPI may be greater this week.

Others said that both the EU and the United States want Greece to stay within the monetary union, since its exit could affect other European countries and the rest of the world. 

(Yonhap News)