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South Korean shares fall on North Korea's nuclear test concerns

South Korean shares fall on North Korea's nuclear test concerns

South Korean shares fell Wednesday after North Korea said its plans to conduct a nuclear test.
However, analysts said the North's Tuesday announcement of plans for a nuclear test will have limited effects on the South Korean market.
"The impact from North Korea's nuclear news is limited. There will be some short-term risks, but it isn't likely to reverse the stock market trend, as the move won't affect the country's ratings immediately," Daewoo Securities' analyst Joseph Han said.
South Korea's benchmark Korea Composite Stock Price Index, or Kospi, fell 1.6 percent to 1352.00 Wednesday after falling to a low of 1345.83 earlier in the afternoon.
The U.S. dollar closed at 949.10 won, up 1.2 won from the previous session.
International ratings agencies said Wednesday they aren't likely to revise the country's ratings immediately, but that the latest development could further increase South Korea's risk profile.
"The prospects of such events leading to economic sanctions severe enough to hasten a collapse of the North Korean regime, or worse, spark a full-scale military conflict, are still relatively remote," said Takahira Ogawa, director of sovereign and international public finance ratings at Standard & Poor's Ratings Services.
Moody's Investors Service's vice president and senior credit officer in the sovereign risk unit Thomas Byrne said Pyongyang's nuclear threat won't have negative consequences for the South's credit fundamentals as long as North Korean geopolitical risks remain contained.


Updated : 2021-05-07 19:45 GMT+08:00