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South Korea stocks plunge on nuke report

(AP)
Updated: 2006-10-09 13:57

Seoul - South Korean stocks plunged Monday following North Korea's announcement that it conducted a nuclear test. The won fell sharply.

The benchmark Korea Composite Stock Price Index, or Kospi, fell as low as 1,303.62, or 3.6 percent after North Korea's official Korean Central News Agency said the underground test was performed successfully.

The Kospi was trading 2.4 percent lower at 1,319.00 at about 1:25 pm in Seoul. The US dollar traded at 959.9 to the South Korean won, up from 949.10 last Wednesday. South Korean markets were closed Thursday and Friday for national holidays.

Markets in South Korea, the world's 10th-largest economy, have long been considered vulnerable to potential geopolitical risks emanating from the North. The two countries, which fought the 1950-53 Korean War, are divided by the world's most heavily armed border.

North Korea said last week that it planned to carry out a test. Reports of Monday's test have yet to be independently confirmed.

An official at South Korea's seismic monitoring center said a magnitude 3.6 tremor felt at the time of the alleged test wasn't a natural occurrence. The official spoke to The Associated Press on condition his name not be used, because he wasn't authorized to provide sensitive information to the media.

South Korea's Defense Ministry said the alert level of the military has been raised in response to the claimed nuclear test.