September 1, 2017 / 3:33 AM / a year ago

S.Korea won gets lift from robust exports; stocks ease

    * S.Korea's August exports surge, inflation at 5-year high
    * Export jump beats market consensus - analyst
    * BOK may need to review normalising policies - analyst
    * Stocks weaker as foreigners and local institutions sell

    SEOUL, Sept 1 (Reuters) - The South Korean won       
strengthened early on Friday as the country's exports saw
another big rise while annual inflation accelerated, raising the
prospect of tighter monetary policy.
    The won            stood at 1,122.7 against the dollar as of
0236 GMT, 0.5 percent firmer than Thursday's close of 1,127.8.
    "Market players were fully aware that it is going to be
another strong month for the exports, but the rise was much
bigger than the expectation," said Ha Keon-hyeong, a foreign
exchange analyst at Shinhan Investment Corp.
    Ha added that a quickening pace of inflation could raise
some concerns that the Bank of Korea might have to review
closely whether to normalise monetary policies.
    The Bank of Korean kept its benchmark interest rate at a
record low of 1.25 percent on Thursday, where it has been since
June last year.            
    South Korean shares, however, did not gain on the trade data
as foreign investors and domestic institutions continued to sell
local equities.
    The Korea Composite Stock Price Index (KOSPI)         was
down 0.2 percent at 2,357.90 points and if it holds at these
levels, is set to end the week in the red.
    For the month of August, the share market also fell,
snapping eight months of gains. 
    Offshore investors sold a net 7.9 billion won ($7.04
million) worth of KOSPI shares while institutions sold a net
105.4 billion won worth.
    Kim Ji-hyung, a stock analyst at Hanyang Securities, said
not much change was expected in foreign demand as markets will
be monitoring economic events such as the U.S. Federal Reserve's
policy meeting on Sept. 19-20.
    Decliners outnumbered advancers 417 to 359.
    Shares of Daewoo Engineering             jumped as much as
10.9 percent on a media report that Malaysia's Petroliam
National Bhd (Petronas) is interested in buying a controlling
stake in the company.             
    September futures on three-year treasury bonds        
gained 0.04 point to 109.32. 
                       0236 GMT    Prev close
 Dollar/won             1,122.7       1,127.8
 Yen/won             10.1990/54       10.2177
 *KTB futures            109.32        109.28
 KOSPI                 2,357.90      2,363.19
 * Front-month futures on three-year treasury bonds

 (Reporting by Dahee Kim; Editing by Jacqueline Wong)
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