South Korean stocks plunged Monday following North Korea’s announcement that it conducted a nuclear test. The South Korean won also fell sharply.
The benchmark Korea Composite Stock Price Index, or Kospi, fell as low as 1,303.62, or 3.6 percent after North Korea’s official Korean Central News Agency said the underground test was performed successfully.
The Kospi was trading 2.4 percent lower at 1,319.00 at about 1:25 p.m. in Seoul. The dollar traded at 959.9 to the South Korean won, up from 949.10 last Wednesday. South Korean markets were closed Thursday and Friday for national holidays.
Markets in South Korea, the world’s 10th-largest economy, have long been considered vulnerable to potential geopolitical risks emanating from the North. The two countries, which fought the 1950-53 Korean War, are divided by the world’s most heavily armed border.
U.S. and South Korean officials could not immediately confirm North Korea’s claim.
But if true, the test could be expected to affect other Asian markets. Japanese stock, currency and other financial markets were closed Monday for a national holiday.