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Seoul: Stocks, won pare gains as traders eye North Korea risks
[SEOUL] South Korean shares and the won hit multi-week highs early on Monday before paring gains amid worries that North Korea could conduct another missile or nuclear test.
Tensions between the North and the United States heightened again after Pyongyang said on Sunday it was ready to sink a US aircraft carrier to demonstrate its military might, and detained a US citizen on Saturday as he attempted to leave the country.
North Korea will mark the 85th anniversary of the foundation of its Korean People's Army on Tuesday. It has in the past marked important anniversaries with tests of its weapons.
The Korea Composite Stock Price Index (Kospi) was up 0.3 per cent at 2,171.61 points as of 0235 GMT, after touching 2,177.89, its highest since March 24 at the beginning of trade.
The South Korean won was up 0.1 per cent at 1,133.4 against the US dollar. It early rose to as high as 1,128.2, the firmer since April 13 as soon as markets opened.
While traders are hunkering down for now in case of possible action by the North, investors remain interested in riskier assets following the result of the first round of the French presidential election over the weekend, said Kim Ji-hyung, a stock analyst at Hanyang Securities.
Centrist Emmanuel Macron, the market favourite, took a big step towards the French presidency on Sunday by winning the first round of voting and qualifying for a May 7 runoff alongside far-right leader Marine Le Pen.
"If the North's provocations are limited to short-range missile launches, market jitters linked to geopolitical risks are expected to peter out," added Mr Kim.
He also said markets are awaiting more details of US President Donald's Trump's tax policies expected April 26.
Offshore investors were set to be net buyers, purchasing 159.7 billion Korean won (S$196.2 million) worth of Kospi shares near mid-session.
Shares of Hana Financial Group jumped nearly 7 per cent on its first-quarter earnings surprise. Steelmaker Posco gained 1.2 per cent.
Decliners outnumbered advancers 527 to 271 June futures on three-year treasury bonds shed 0.07 point to 109.36.