By Kim Jae-won

Over the past few weeks, the financial market has been a roller coaster ride with economic uncertainties deepening due to growing woes over economies in the eurozone and China.

Market volatility is expected to linger for a while as global investors are likely to pull their money out of emerging markets. In this environment, individual investors are scratching their heads over whether now is the time to buy undervalued shares or if they should wait further.

Korean stocks fell 0.67 percent Friday after neither U.S. nor European central banks unveiled detailed stimulus programs to bolster growth. The benchmark Korea Composite Stock Price Index (KOSPI) lost 12.31 points to 1,835.64, snapping a two-day gaining streak.

Local analysts recommend investors to stick to banking shares and blue chip companies, such as Samsung Electronics and Hyundai Motor, which are less vulnerable to external shocks and can weather a crisis.

“I recommend investors to buy stocks of Samsung Electronics as the company’s smartphone market share is expected to increase,” said Seong Yeon-ju, an analyst from Daishin Securities in her Friday report.

Seong said sales of the Galaxy S3, the latest smartphone from Samsung, will top 30 million in the second half of this year as the company increases its presence in third-generation (3G) mobile telecommunications and long-term evolution (LTE) markets.

Some suggest investors buy banking stocks which have been underestimated for a long time. They say a Spanish bailout fund may restructure the European country’s banking sector, which will equally boost the performance of Korean lenders.

Spain has secured a European lifeline of up to 100 billion euros ($125 billion) to save its stricken banks and try to avert a broader financial catastrophe after emergency talks with its eurozone partners. After the hastily organized video conference, lasting more than two hours on Saturday, the 17 eurozone finance ministers issued a statement saying they were “willing to respond favorably” to a Spanish plea for help.

Koo Kyeong-hoe, a Hyundai Securities analyst, said of Korean banking companies’ stock in a report: “KB Financial is the key stock of the industry but its value has been underestimated. The company lowered its risk by setting apart sufficient reserves last year, and has little exposure to big companies.” He expects the share price of KB will rise to 59,000 won from its Thursday price of 38,100 won.

Local sources said that besides the Greek elections slated for June 17, investors will be affected by U.S. retail sales data and its consumer sentiment index due out this week.

The surprise announcement by China to cut its key interest rate and boost domestic economic growth is expected to exert a positive influence on stock prices, particularly in steel and chemicals.

KDB Daewoo Securities says investors may not regret buying stocks of Dongwon Industries as the food company is showing a strong performance in the second quarter thanks to an increasing number and price of tuna.

Baek Woon-mok, an analyst from Daewoo, says that Dongwon will see its stock price rise 26 percent to 230,000 won as it is expected to grow further in the coming months. “Dongwon will see its sales reach 194.7 billion won in the second quarter, up 29.7 percent from a year ago. Its operating profits will rise 87.5 percent to 34.2 billion won.”