Korean Won Rebounds From Decade-Low as Foreigners Buy Stocks

By Kim Kyoungwha

Oct. 29 (Bloomberg) -- South Korea's won rose the most in two weeks after overseas investors turned net buyers of the nation's shares, helping drive the Kospi stock index's biggest two-day gain since 1998.

The currency, which yesterday sank to a decade-low, snapped a six-day losing streak after Korea Exchange figures showed international investors bought more of the nation's shares than they sold for the first time in 11 days. President Lee Myung Bak said yesterday the government plans to announce stimulus measures in ``early November'' to help the economy, which expanded in the third quarter at the slowest pace in four years.

``Rocketing stocks are lending big support to the won,'' said Lee Myung Hoon, a currency dealer with Industrial Bank of Korea in Seoul. ``Still, it's too early to say markets are normalizing given that sentiment remains frail.''

The won rose 3.8 percent to 1,414 per dollar at 9:57 a.m. in Seoul, according to Seoul Money Brokerage Services Ltd. The Kospi jumped 7 percent to 1,069.49, taking its two-day advance to 13 percent. The benchmark tumbled 20 percent last week, its worst performance in at least two decades.

To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net.