Seoul: Stocks, won drop on suspected North Korean nuclear test

[SEOUL] South Korean shares and won fell early on Friday following a suspected North Korean nuclear test.

South Korea's presidential Blue House will hold a National Security Council meeting at 0200 GMT on Friday after seismic activity was detected near North Korea's known nuclear test site, activity South Korea said could have been a nuclear test.

The Korea Composite Stock Price Index (Kospi) was down 1.2 per cent at 2,038.21 points as of 0201 GMT.

The won was quoted at 1,100.1, down 0.7 per cent compared to Thursday's close of 1,092.6.

The Bank of Korea kept its interest rates on hold at 1.25 per cent for September. The decision was expected and had limited impact on the market.

"Shares will not extend losses unless something surprising comes out from government officials later on about North Korea's artificial earthquake," said Kim Ye Eun, a stock analyst at LIG Investment & Securities.

She added that the fact the South Korean share markets will be closed from next Wednesday through Friday due to a national holiday, is making foreign investors wary of taking positions.

Offshore investors were set to be net sellers, offloading 55 billion Korean won (S$67.36 million) worth of Kospi shares near mid-session, weighing on the index.

Market heavyweight Samsung Electronics Co Ltd lost 2.6 per cent, Naver Corp 2 per cent.

Decliners far outnumbered advancers 655 to 158.

September futures on three-year treasury bonds shed 0.09 point to 110.74.

REUTERS