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Seoul: Won slides on offshore selling; stocks tread water
[SEOUL] The South Korean won slid on Friday as offshore funds kept dumping the currency for hedging, while foreign banks continued to buy dollars against the won.
The won looked set to extend its fall to a fourth straight session, and was quoted at 1,238.5 against the dollar as of 0201 GMT, down 0.9 per cent from Thursday's onshore close of 1,227.4.
Currency traders suspected intervention by foreign exchange authorities to stem the won's decline in morning trade.
The finance ministry told Reuters on Friday that the South Korean government is heightening its wariness over the won's continued weakening against the dollar.
"I would not be surprised to see won retreating further in coming days, although a lot of negative news, like the rate cut calls and geopolitical tensions, have been priced in at current levels," said Jeon Seung-ji, a foreign-exchange analyst at Samsung Futures.
Comments by Federal Reserve officials cemented expectations of slow U.S. interest rate hikes, with San Francisco Fed President John Williams stating a gradual rate hike path as'best course,' but these failed to support emerging Asian currencies.
South Korean shares open lower, but then recouped early losses and leveled out, as markets took a breather after a gain of 4 per cent this week.
The Korea Composite Stock Price Index (KOSPI) was trading at 1,909.46 points as of 0201 GMT, virtually unchanged form the previous close of 1,908.84.
Shares in Hyundai Merchant Marine jumped 10.3 per cent it said it would issue 6 million shares of common stock through private placement for a debt-equity swap.
STX Engine, a marine diesel engine manufacturer, surged 21 per cent ahead of its earnings report later in the day.
Foreign investors were set to be net buyers, purchasing a net 36.9 billion Korean won (S$42 million) worth of KOSPI shares near mid-session.
March futures on three-year treasury bonds gained 0.05 points at 110.36.