S.Korea won edges up on stocks; intervention seen

SEOUL, Sept 22 - The South Korean won gained slightly against the dollar on Tuesday as local shares hit a 15-month closing high amid continuous stock buying by foreign investors and led by exporter demand for settlements.

The foreign exchange authorities, however, bought dollars for intervention, preventing the won <KRW=> from breaking through a resistance level of 1,200 per dollar, traders said.

Analysts said the local currency was expected to strengthen past the line soon on growing appetite for the country's assets among foreign investors amid a brighter outlook for Asia's fourth-largest economy.

"Despite some concerns over valuations, investors will keep chasing Korean stocks and the won if we see upbeat data more," said Jeong My-young, a currency strategist at Samsung Futures Inc.

"The authorities appeared to absorb a mass of dollars today. But they will eventually let the won go," she added.

The South Korean unit was quoted at 1,202.75/4.75 per dollar as of 0600 GMT, compared with Monday's domestic close <KRW=KFTC> of 1,204.4.

Seoul shares <.KS11> ended up 1.38 percent at 1,718.88, the highest close since late June 2008, with foreign investors purchasing a net 482.6 billion won worth of stocks.

Foreigners have bought a total of 5.21 trillion won ($4.33 billion) in shares so far this month.

On the economic front, the Asian Development Bank earlier upgraded its economic growth forecast for South Korea this year to minus 2.0 percent from the previous minus 3.0 percent. [ID:nSP464566]

0600 GMT 0035 GMT Prev close Won 1,202.75/4.75 1,205.5/5.8 1,204.4 Yen/won 13.1132/93 13.1093/51 13.0937/77 KOSPI 1,718.88 1,704.49 1,695.50