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Seoul: Won strengthens on expansionary policy hopes, stocks rebound
[SEOUL] Hopes that expansionary fiscal policies from the government of newly elected President Moon Jae-In would boost the economy pushed up the South Korean won, while global risk sentiment strengthened on a rise in oil prices, further supporting the currency.
The won was quoted at 1,128.0 against the US dollar as of 0246 GMT, up 0.7 percent versus Wednesday's close of 1,135.8.
The risk-on mood also drove a rebound in South Korean shares after Wednesday's sharp losses, with the Korea Composite Stock Price Index (Kospi) up 0.9 percent at 2,289.74 points.
Min Gyeong-Won, a foreign exchange analyst at NH Futures, noted market participants' expectations for expansionary fiscal policy, but added: "While the market is betting on stronger won, there has to be a decisive momentum in the market for the currency to rise past the 1,130 level and hold on to the new level," Mr Min said.
"Market players' wait-and-see approach to the Federal Reserve's rate movements for the year is holding the dollar, preventing a firm gain by the won."
Offshore investors were set to end a four-day buying spell, selling a net 16.8 billion Korean won (S$20.94 million) worth of Kospi shares near mid-session.
But LG Electronics gained over 3 per cent, helped by foreign buying, while shares of Samsung SDI rose 4.2 per cent on tech sector optimism.
Advancing issues outnumbered declining ones by 474 to 323.
June futures on three-year treasury bonds gained 0.03 point to 109.23.