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Korea won ends weaker as stock fall spurs dlr buys

SEOUL: The South Korean won retreated against the dollar on Wednesday as a sharp fall in local stocks following overnight plunges on Wall Street spurred offshore dollar buying and short-covering by banks, dealers said.

The won ended the day at 1,135.0 compared with on Tuesday's close of 1,122.5.

It opened at 1,125.5 and ranged between 1,122.5 and 1,135.0. "The market saw a strong rebound in the greenback caused by a steep fall in local stocks without too much help from the government," said a dealer at a domestic bank.

The greenback's rise was ignited as foreign investors who sold a net 30 billion won worth of shares in the morning stepped up the selling in late trade, dealers said.

Foreign net selling of local stocks were 112.8 billion won for the full day.

"Foreign investors will repatriate their investments in local stocks which fanned demand for the greenback in the forex market," said a dealer at a domestic bank.

Short-covering, sparked by offshore dollar buying in early trade, pushed the won/dollar down to 1,135.0 at the close.

When the dollar advanced to 1,133, the market faced heavy dollar sales by corporations attempting to take profits, dealers said.

On Thursday, overnight performance on Wall Street will dictate the direction of the local unit on Thursday, dealers said.

In the non-deliverable forward market, the six-month won stood at 1,132/34 versus 1,125/27 late Tuesday.

The one-year won was quoted at 1,139/41 versus 1,133/35.-Reuters