* Foreigners continue to underpin the main bourse
* Won firms on exporter demand
SEOUL, May 26 Seoul shares inched down from
previous session's 5-1/2 month closing high on Monday morning,
as profit-taking by local institutional investors offset foreign
net inflows while the won firmed modestly.
The Korea Composite Stock Price Index (KOSPI) was
down 0.3 percent at 2,012.12 points as of 0243 GMT. On Friday,
it closed at its highest level since Dec. 2.
Kakao Corp, the operator of South Korea's dominant mobile
messenger service Kakao Talk, on Monday said it will merge with
the country's No. 2 Internet portal Daum Communications Corp
in a back door listing.
That development pushed down shares of Naver Corp
, the country's biggest Internet portal operator and
owner of mobile messenger operator Line, by 3.9 percent on
concerns over intensifying competition.
But aside from the merger news, "the market is showing no
major movements," said Kim Byung-yeon, an analyst at Woori
Investment & Securities.
The main index will likely be trapped between 2,000 and
2,050 "as investors seek more evidence of improving global
demand, thus some strong earnings from local exporters," he
Near mid-session, foreign investors were net buyers of 28
billion won ($27.3 million) of KOSPI shares near mid-session
while local institutional funds sold 47 billion won.
Through Friday, foreigners were net buyers for nine
consecutive sessions, bringing in nearly 2.5 trillion won.
In the foreign exchange market, the won strengthened on
demand by exporters for month-end settlements, but gains were
contained by caution over possible dollar-buying intervention by
South Korean foreign exchange authorities.
"Dollar-buying on dips around the 1,020 level amid
intervention concern will likely keep the USD/KRW pair near the
current level," said a currency dealer.
The dealer expected the won to be in a band of 1,018 to
1,032 against the dollar this week, though South Korean current
account data and first quarter U.S. gross domestic product data
due this week might move the market.
The local currency was quoted at 1,023.7 against
the dollar as of 0243 GMT, up 0.1 percent from Friday's onshore
close at 1,024.6.
0243 GMT Prev close
Dollar/won 1,023.7 1,024.6
Yen/won 10.0432/373 10.0456
*KTB futures 106.02 106.02
KOSPI 2,012.22 2,017.17
* Front-month futures on three-year treasury bonds
($1 = 1024.5500 Korean Won)
(Reporting by Jungmin Jang; Additional reporting by Yena Park
and KyoungHo Lee; Editing by Richard Borsuk)