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Seoul: South Korean markets fall on global economy fears, clash with North Korea
[SEOUL] South Korea's won, shares and bond futures all fell early on Friday as heightened tensions with North Korea after an exchange of shelling added volatility to markets already hit by concerns about the global economy.
Share prices fell as much as 3 per cent and the won lost as much as 0.4 per cent against the dollar, although they recouped some of the losses later. Government bond futures fell slightly.
The government pledged to help stabilise the markets if needed and called for calm, but 95 per cent of the issues on the stock exchange fell as investors flocked to the sidelines. Foreign investors were net buyers at a small scale.
"The stock market tumbled at the initial shock from the news about conflicts with North Korea but is showing some signs of regaining some stability quickly," said Lee Kyung-min, an analyst at Daishin Securities.
The Korea Composite Stock Price Index was down 1.9 per cent at 1,879.19 points after the first 30 minutes of trade, recovering from a session low of 1,856.91 points. The won was quoted at 1,188.4 per dollar, down 0.3 per cent from the previous domestic close of 1,185.1.
Tensions grew between the two Koreas as the South fired a barrage of artillery rounds into North Korea on Thursday after the North shelled across the border to protest against anti-Pyongyang propaganda broadcasts by Seoul.
September futures on three-year treasury bonds were down 0.03 points at 109.44.