S.Korean won up on govt; stocks sales cut gains

SEOUL: The South Korean won rose against the dollar on Wednesday as the authorities were seen selling dollars to lift the local unit, but cut much of its early gains on foreign investors' mouting local stock sales. Importers also sold the won for settlements as investors saw the currency's rise during the session as excessive.

The won was quoted at 1,088.3/8.7 per dollar as of 0250 GMT, compared with Tuesday's domestic close of 1,101.3. It strengthened to as high as 1,081.9. "It looks difficult for the won to strengthen past the 1,085 level for now and more importers are chasing dollars," said a foreign bank dealer.

Seoul shares edged down 0.01 percent as foreign investors sold a net 317.9 billion won worth of stocks in the country's main exchange. They unloaded a net 208.3 billion in the prior session.

Currency market players showed a muted reaction so far to media reports that North Korean leader Kim Jong-il was almost certainly ill, although if confirmed the news could dampen the won by boosting political uncertainty, analysts said.

"In the short-term, we will face big uncertainties until North Korea has a new leader, and that is negative to the won," said Jeon Seung-ji, a currency analyst at Samsung Futures Inc.