Seoul: Won flat after North Korea hoax, stocks rise

[SEOUL] The South Korean won was flat by midday on Friday, after early volatile trade following a fake report on the death of North Korean leader Kim Jong Un which rattled foreign exchange markets.

The won was quoted at 1,171.9 per US dollar as of 0224 GMT, little changed from Thursday's close of 1,171.4.

It rose against the US dollar earlier in the session after campaigning for the Brexit vote was suspended.

A British member of parliament was shot dead in the street on Thursday, causing shock across Britain and the suspension of campaigning for next week's referendum on the country's EU membership. Worries over a possible UK exit from the European Union has dominated financial markets all week.

"The investors have no strong inclination to buy safe-haven assets right now since Brexit concerns have faded slightly, supporting the won today," said Jeong My-young, a foreign exchange analyst at Samsung Futures.

A hoax website reported that North Korean leader Kim had been killed by a suicide bomber on Wednesday, fuelling market rumours that led to a brief, sharp drop in the won against the US dollar.

A South Korean defence ministry official has told Reuters the rumour does not appear to be true.

"The won was set for a rebound early in the session as Brexit worries eased, but then fluctuated wildly after the Kim Jong Un rumour spread," a trader at a bank told Reuters.

As a result, the won fell as low as 1,178.0 per US dollar, down about one per cent compared with the intraday high of 1,167.2.

For the week, the won was expected to post a loss.

South Korean shares rose in part on expectations the Brexit referendum might be postponed after campaigning was halted.

The Korea Composite Stock Price Index (Kospi) was up 0.5 per cent at 1,961.00 points.

Foreign investors were poised to be sellers, offloading a net 46.7 billion won (S$53.81 million) worth of Kospi shares near mid-session.

The share index, however, looked set for the biggest weekly percentage loss in four months, losing 2.8 per cent.

Tech giant Samsung Electronics Co Ltd gained 1.6 per cent while steelmaker Posco lost 1.5 per cent.

Advancers outnumbered decliners 547 to 257.

June futures on three-year treasury bonds shed 0.06 point to 110.65.

REUTERS