By Jongwoo Cheon
SINGAPORE (Reuters) - The rupee led gains among emerging Asian currencies on Tuesday as exit polls suggested pro-reform and business-friendly opposition parties had won elections.
The South Korean won rose on exporters' demand for settlements, while the Philippine peso eased on profit-taking. Trading was subdued as some financial markets in Asia, such as Singapore, were closed for holidays.
The rupee rose as much as 0.8 percent to 59.59 per dollar as the Nifty hit a record high.
The partially convertible currency later pared some of its gains on caution that authorities may intervene to curb strength in the second-best performing emerging Asian currency so far this year.
Hindu nationalist Narendra Modi is set to become India's next prime minister, four major exit polls showed on Monday, with his opposition party the Bharatiya Janata Party (BJP) and its allies forecast to sweep to a parliamentary majority in the world's biggest-ever election.
"We expect the rupee to rally decisively past 60 on results of exit polls from Indian elections, which showed a win by the opposition BJP by a wider than anticipated margin," Credit Agricole CIB said in a client note.
"While official results are not due until Friday and - if history is any guide - the actual BJP take could be lower, it is now highly likely that Modi will be the new Prime Minister. In the short run, this should stole positive sentiment for INR assets," it added referring to the rupee.
The rupee has risen 3.4 percent against the dollar so far this year as foreign investors have chased battered Indian financial assets on hopes of a BJP victory in the elections.
Last year, the Indian currency lost 11 percent as the country, along with Indonesia, were seen more vulnerable to the U.S. Federal Reserve's reduction in monetary stimulus, due to its current account deficit.
WON
The won rose on bids from exporters such as shipbuilders and as foreigners' demand lifted Seoul shares.
Foreign investors turned to net buyers in the main local stock market after dumping a total of 1.2 trillion won ($1.2 billion) in the previous eight consecutive sessions, according to the Korea Exchange.
South Korea's foreign exchange authorities, however, were suspected of intervening to stem the won's gains, traders said.
That came as the won rose as much as 0.3 percent to 9.9941 to the yen, trying to breach a resistance area between 9.9500-10.0000.
"Today's dollar offers were not seen from speculators, while intervention dollar bids looked pretty solid," said a foreign bank trader in Seoul.
"I don't think the authorities may give up easily. It is the key if they lift the dollar high enough to spur short-covering," the trader said.
PHILIPPINE PESO
The peso eased as interbank speculators continued to take profits from the best performing emerging Asian currency of the last week.
Most of the Philippine currency's non-deliverable forwards fell, putting pressure on spot.
A senior Philippine bank trader in Manila said the peso may ease further, adding investors may cover bearish bets on the dollar to the peso.
The 14-day dollar/peso relative strength index stood around the 30 threshold, indicating the pair is near an oversold territory.
"The market is still short (dollar)," said the trader.
The peso may move between 43.50 per dollar and 44.20 for the rest of the week, he added.
($1 = 1024.35 won)
* Financial markets in Malaysia, Singapore and Thailand are closed for holidays.
(Additional reporting by KyoungHo Lee in SEOUL; Editing by Kim Coghill)
