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Financial Market Not Roiled Due to Learning from Past Experience
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Financial Market Not Roiled Due to Learning from Past Experience
  • By matthew
  • February 13, 2013, 10:38
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Even North Korea’s third nuclear test didn’t spook the domestic financial market. Foreign investors even bought more than 130 billion won worth of stocks. With a nuclear test by the north already expected, a predominant sentiment was that the so-called North Korean risk was finally resolved.

On February 12, the KOSPI slid 5.11 points, or 0.26% from a day earlier to be closed at 1,945.79, a contrast to the market’s reaction to the death of then-North Korean leader Kim Jong-il on December 19, 2011, which prompted a 3.34%, or 1,776.93 points plunge in a day. This round of nuclear test sent a shock wave much smaller than did the first test that occurred on October 9, 2006, which brought stocks down by 2.41%, or 1,319.40 points, and similar to the level seen in the wake of the second test, which pushed down stocks by 0.2%, or 1,400.90 points.

The KOSPI on Tuesday repeatedly moved up and down the 1,950 level with a combination of net buying by foreigners and net selling by institutional investors, and slipped below that level after the announcement of the north’s nuclear test, but soon it regain stability.

In the foreign exchange market, unlike expectations, the Korean won strengthened against the dollar. In the Seoul foreign exchange market, the won went up 4.9 won, or 0.45% points against the dollar from a day earlier to close at 1,090.80 won. The won moved up to the high 1,090 won level in early trading, then turned down with the news of the nuclear test. Experts figure that this round of test caused a little shock to the market as it had been reflected well ahead on the market.