By Cho Hyung-kwon
Staff Reporter


The Korean won increased its gain against the U.S. dollar to a seven-year high on Thursday despite Finance-Economy Minister Lee Hun-jae’s strong indication the government will be ready to intervene in the market if necessary to slow the won’s gain.



The won reached its highest level since Nov. 21, 1997, closing at 1,065.4 won against the greenback as traders speculated there was not much intervention in the market. Some analysts said the next support level would be 1,050 won but added the won could gain even more unless the government steps in.

The dollar lost ground to major currencies, falling to a seven-month low against the Japanese yen to below 104 yen and to an all-time low against the euro.

A meeting of finance ministers and central bankers from industrial and emerging countries this weekend is expected to give direction as to how much further the dollar will weaken against global currencies

The Seoul stock market also declined as a stronger won raised concerns that exporters’ profitability will be hurt due to worsened price competitiveness.

The Korea Composite Stock Price Index (KOSPI) fell 9.58 points, or 1.08 percent, to 875.84, while the tech-heavy Kosdaq dropped 3.33 points, or 0.88 percent, to 372.56.

Hyundai Motor lost 2.77 percent to 52,600 won, LG Electronics declined 6.47 percent to 67,900 won and Hynix Semiconductor slid 4.8 percent to 11,900 won.

Banking stock including Kookmin Bank, Hana Bank and Korea Exchange Bank also closed in negative territory, while KT added 1.53 percent to 39,800 won and Samsung Electronics gained 0.43 percent to 463,500 won.

Institutional investors were the largest net sellers of 104 billion won. Foreign and retail investors purchased a combined 43 billion won of shares.

On the Kosdaq, Daum Communications, NHN, Asiana Airlines and Hanaro Telecom finished weaker, while LG Telecom gained 1.11 percent to 4,095 won and Webzen rose 0.82 percent to 24,500 won.

kevincho@koreatimes.co.kr