Won Holds Slide as Brexit Angst Lingers; Equities Add to Decline

Updated on
  • Kospi index extends slide after biggest rout in 4 months
  • U.K’s EU exit could deliver a “temporary shock”: Hyundai

South Korea’s won was little changed after posting its biggest two-day slump in more than three weeks, as concerns remain that a U.K. vote to leave the European Union would roil global financial markets.

The benchmark stock index added to Monday’s losses and touched the lowest in more than two weeks as foreign investors dumped Korean shares for a third straight session.

“The popularity of safe havens such as the Japanese yen and the avoidance of riskier assets are being priced in at the moment,” said Chung Sung Yoon, a currency analyst at Hyundai Futures Corp. 

The won ended nearly flat at 1,173.23 per dollar as of the 3 p.m. close in Seoul, after sliding 1.5 percent during the past two sessions, the biggest two-day fall since May 19. The Kospi finished down 0.4 percent after dropping 1.9 percent on Monday, the biggest daily loss since Feb. 11. Foreign investors sold a net $116.9 million on top of $167.2 million they offloaded on Monday.

“Brexit issues have been overshadowing the market lately,” Chung said. “A temporary shock” would hit local financial markets if the U.K. votes in favor of leaving the EU and that could send the won down to 1,190 per dollar or weaker, he said.

Bonds declined after gains on Monday. The three-year government yield rose to 1.35 percent and the 10-year yield increased to 1.63 percent from their record low levels, Korea Exchange data showed.

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