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Seoul: Won, stocks rebound as North Korea worries ease

[SEOUL] The South Korean won and shares saw modest gains early on Wednesday, recovering from earlier losses as market participants' anxiety following North Korea's latest missile launch began to recede.

The United Nations also held back on any threat of new sanctions on North Korea while demanding Pyongyang halt its weapons programme.

The won was quoted at 1,121.8 as of 0238 GMT, up 0.4 per cent compared to Tuesday's close of 1,126.4.

The Korea Composite Stock Price Index (Kospi) also edged up 0.1 per cent to 2,366.09 points.

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"North Korea risks lasted for just a short while and US stocks also rebounded, improving overall market sentiment," said Ha Keon-Hyeong, a foreign exchange analyst at Shin Investment Corp.

Measures of risk such as the spread on South Korea's five-year credit default swaps also edged lower to 60.2 basis points from 62.3 on Tuesday.

Mr Ha expected the won to move in narrow ranges throughout the week with a batch of economic indicators such as South Korea's exports and US employment to be published later this week.

Foreign investors were set to be net buyers of Kospi shares, although volumes were relatively small near mid-session.

Advancing issues slightly outnumbered declining ones by 398 to 366.

Tech major LG Electronics rose as much as 4.7 per cent after it said it had joined the bidding for ZKW Group, a maker of car lights, in a deal that could be worth US$1.2 billion.

Shares of Hyundai Motor skidded to their lowest in more than four months after the South Korean carmaker said production at its four Chinese factories had been suspended since last week because of supply disruptions.

September futures on three-year treasury bonds gained 0.06 point to 109.28.

REUTERS

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