Seoul: Won slightly down ahead of Fed meeting; stocks steady

[SEOUL] The South Korean won slightly weakened against the US dollar on Tuesday morning while investors took a cautious stance ahead of the US Federal Reserve's policy meeting to be released later this week.

The won was traded at 1,149.4 per US dollar, down 0.1 per cent compared to Monday's close of 1,147.8 as of 0213 GMT.

"If the Fed takes on an optimistic outlook over the global economy, it will be taken as a sign for a rate hike in June, which will then pressure risky assets broadly," said Park Yuna, a foreign exchange analyst at Dongbu Securities.

Ms Park added that the won's trading will be boxed in at around the 1,150 level for the week with exporters' month-end US dollar selling offsetting possible further losses.

South Korean shares were steady although decliners far outnumbered advancers on the help of continued offshore demand.

The Korea Composite Stock Price Index (KOSPI) was up 0.1 per cent at 2,017.28 points.

Both the local currency and shares showed little reaction to South Korea's first-quarter GDP data, which showed growth cooled to 0.4 per cent, slightly lower than forecast.

Foreign investors were poised to be buyers for ten straight sessions, adding 91.5 billion Korean won (S$107.8 million) worth of KOSPI shares near mid-session.

Semiconductor company SK Hynix Inc shares gained 5.1 per cent as investors expect the company's performance may have bottomed after its first-quarter results turned out to be weaker than forecast.

Market heavyweight Samsung Electronics Co Ltd rose 1.2 per cent while Hyundai Heavy Industries Co Ltd was up 3.7 per cent.

June futures on three-year treasury bonds gained 0.01 point to 110.32.

REUTERS