Stocks plunge; analyst sees risk for peninsula

Seoul stocks plunged as North Korea’s claim that it performed its first-ever nuclear test dramatically dampened investor sentiment.
The benchmark Kospi slid 32.6 points, or 2.4 percent, to close at 1,319.4.
Samsung Electronics shed 0.9 percent to 642,000 won ($666), and Hyundai Motor, Korea’s top automaker, lost 1.5 percent.
Subsidiaries of Hyundai Group, the greatest proponent of industrial cooperation with the North, were hit hardest by the crisis. Hyundai Engineering & Construction dropped 6.2 percent, and Hyundai Merchant Marine plunged by the 15-percent limit.
SK Networks nosedived 12.6 percent. The oil refinery has been pushing a plan to open gas stations in the North and neighboring areas.
“The current situation is quite different from the missile test back in July. This time, the geographical risk on the Korea Peninsula is likely to increase significantly,” said Park Hyo-jin, an analyst at Goodmorning Shinhan Securities Co. “The Kospi is likely to lose about 5 to 10 percent, or 100 to 150 points, in the short term if the nuclear crisis continues.”
Seondo Electric and Kwang Myung Electric Engineering, which sell electric wires to North Korea, dropped 13.1 percent and 13.9 percent, respectively.
Huneed Technologies, which produces military communication devices, soared 10.7 percent.
Trading volume was 396.1 million shares, worth 4.5 trillion won. Decliners far outpaced advancers, 780 to 54.
The tech junior Kosdaq also fell by 48.22 points, or 8.2 percent, to end at 539.1.
Asiana Airlines dropped 4 percent. But L.C Tek and Victek, which produce communication devices for the military, rose by the daily limit of 15 percent and by 12.1 percent, respectively.
Trading volume was 717.4 million, worth 2 trillion won. Decliners beat advancers, 923 to 21.

by Jung Ha-won