Seoul stocks rise to 3-week peak, won inches higher

Tue May 13, 2014 10:58pm EDT

* KOSPI extends rally into 5th day as foreigners buy
    * Won firms modestly amid intervention caution

    SEOUL, May 14 (Reuters) - Seoul shares rose to their highest
level in three weeks on Wednesday, buoyed by hopes that upbeat
global economic prospects would underpin corporate earnings,
while the won inched higher on demand from exporters for
settlements.
    The Korea Composite Stock Price Index (KOSPI) was up
0.7 percent at 1,996.56 points as of 0225 GMT, hitting its
highest point since April 24 and extending gains into a fifth
day. The index rose 2.2 percent in the four sessions through
Tuesday. 
    "While keeping a wary eye on the slowing Chinese economy,
investors are looking to strengthening demand from developed
economies, which is brightening the earnings outlook for local
exporters in the coming quarters despite the recent concerns
over the rapid appreciation of the won," said Tong Yang
Securities analyst Cho Byung-hyun.
    South Korean exports grew the most in 15 months in April as
demand from the United States firmed, data showed on May 1,
reinforcing recent signs that a recovery in global consumption
was gathering pace although China remained a
worry. 
    "With the index reaching near the psychologically important
2,000 point threshold at a fast pace, a correction is likely in
the near term," Cho added.
    China's economic activity showed across-the-board weakness
in April, with data from output to investment and consumption
all missing market expectations, sparking new calls for Beijing
to ease policies to shore up growth. China is
South Korea's largest export market.
    Foreign investors purchased a net 106.4 billion won ($104
million) worth of KOSPI shares, mainly in beaten-down
heavyweights including automakers.
    Autoparts maker Hyundai Mobis Co Ltd advanced
2.9 percent while automakers Kia Motors Corp and
Hyundai Motor Co gained 2.3 percent and 1.1 percent,
respectively.
    In the foreign exchange market, the won gained
modestly as exporters offloaded dollar holdings for settlements,
offsetting caution over possible intervention by the South
Korean authorities to hamper further strength in the currency.
    The local currency was quoted at 1,021.6 against
the dollar as of 0225 GMT, up 0.1 percent from Tuesday's onshore
close at 1,022.1.
        
                       0225 GMT    Prev close
 Dollar/won            1,021.6       1,022.1
 Yen/won        9.9941/10.0010        9.9941
 *KTB futures           105.93        105.90
 KOSPI                1,996.56      1,982.93
 * Front-month futures on three-year treasury bonds
($1 = 1022.1500 Korean Won)

 (Reporting by Jungmin Jang; Editing by Chris Gallagher)
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