S.Korea won hits near 6-year peak, intervention curbs gains

Sun Jun 29, 2014 11:44pm EDT

* Won on track for 5th straight winning month
    * Stocks up, but headed for losses in 1H 2014

    SEOUL, June 30 (Reuters) - The South Korean won 
scaled near a six-year peak against the dollar on Monday
morning, but it came off session highs on suspected intervention
by the local foreign exchange authorities. 
    The won hit an intraday high of 1,010.8 per dollar, the
strongest since July 31, 2008, but quickly pulled back to
1,012.5 on the suspected dollar-buying intervention by local
authorities.
    "It appears to be an intervention. (The local authorities)
are purchasing the dollars through two foreign banks," a
currency dealer at a foreign bank said.
    It was quoted at 1,011.6 versus the dollar as of
0342 GMT, up 0.2 percent from Friday's onshore close at 1,013.4.
    On Friday, a Bank of Korea data showed the country posted
another sizeable current account surplus in May. 
    The won's rapid rise at the start of this year drew concern
from South Korean foreign exchange authorities as policy makers
worried it could hurt the nation's exporters.  The currency is
up 4.3 percent so far in the first half of 2014, and is on track
to post a fifth consecutive month of gains.
    In the stock market, the Korea Composite Stock Price Index
(KOSPI) added 0.4 percent to 1,995.66 points as of 0342
GMT, but looked set to book losses of 0.8 percent for the first
half of the year.
    "Should the U.S. and China indicators this week show the
global economic recovery is intact, the market will probably
move higher," said Kim Sung-hwan, an analyst at Bookook
Securities. "However, the strength of the momentum will be
determined by corporate earnings, especially that of Samsung
Electronics."
    The quarterly earnings season will get underway mid-July.   
Domestic institutional investors positioned as net buyers by
purchasing 34 billion won ($33.62 million) worth of KOSPI shares
near mid-session and appeared set to extend a net buying spree
to an eighth consecutive session, the longest streak since
December 2013.
    Offshore investors also purchased a net 62 billion won.
   DRAM memory-chip maker SK Hynix Inc, the most
actively traded stock in the morning session, rose 1.7 percent.
    Hyundai Engineering & Construction Co Ltd 
advanced 3.4 percent after the company on Monday said it had won
an order worth 3.53 trillion won to upgrade oil refinery
facilities in Venezuela from Petroleos de Venezuela, S.A.
 
    In contrast, Hyundai Motor Co, the second
largest component in KOSPI, slid 1.1 percent as the appreciation
in the local currency raised concerns about a cut in export
earnings.    
                       0342 GMT    Prev close
 Dollar/won            1,011.6       1,013.4
 Yen/won            9.9872/822        9.9857
 *KTB futures           106.41        106.39
 KOSPI                1,995.66      1,988.51
 * Front-month futures on three-year treasury bonds
($1 = 1011.4000 South Korean Won)

 (Reporting by Jungmin Jang; Additional reporting by KyoungHo
Lee)