SEOUL: The South Korean won rose to a fresh nearly six-year high on Wednesday morning after a long public holiday as the dollar eased, while local stocks extended losses to a six-week trough.
South Korean financial markets were closed on Monday and Tuesday for public holidays.
The local currency was quoted at 1,027.0 against the dollar as of 0237 GMT, up 0.3 percent from Friday's onshore close at 1,030.3. The won hit as high as 1,026.0, the strongest since Aug. 8, 2008.
"The non-deliverable forwards have persistently bolstered the won on favourable variables during the onshore market close, and such momentum is carrying over," said Woori Futures analyst Son Eun-jung. She was referring to upbeat US nonfarm payrolls data and the euro zone factory activity survey, which helped risk sentiment, while the dollar eased on the Fed's dovish comments on a rate hike.
"Fed chief Janet Yellen is expected to speak in a dovish tone at the congressional testimony later today to extend the dollar's weakness, but caution over possible intervention by local authorities will check the won's rise," added Woori's Son.
The Korea Composite Stock Price Index (KOSPI) was down 0.9 percent at 1,941.50 points as of 0237 GMT after touching an intraday low of 1,940.02, the weakest since March 25. The KOSPI is headed for an eight straight session of losses, which will be the longest skid since a 9-day losing streak set in early September, 2000.
"The grim corporate earnings results appear to be extending over to the second quarter at this moment, and investors are searching for new variables from the US and China while tensions in the Ukraine continue to escalate," said Lee Jae-mahn, an analyst at Hana Daetoo Securities.
"At a time of absence in momentum, the market goes downward, not sideways."
Foreign investors sold a net 121 billion won ($117.4 million) worth of KOSPI shares near mid-session, weighing on the index.
Grim January-March quarter earnings results dragged shipbuilders, with Hyundai Heavy Industries Co Ltd dropping 2.1 percent and Samsung Heavy Industries Co Ltd down 3.5 percent.
June futures on three-year treasury bonds ticked up 0.03 points to 105.87 as investors rotated into fixed-income assets from equities.
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