SEOUL: South Korea's stock market slipped on Wednesday, Nov 24 after North Korea fired dozens of artillery shells at a South Korean island, but the index bounced from an initial low as funds and foreign investors searched for oversold stocks, analysts said.
The main KOSPI index was down 1.33 percent at 1,903.14 points as of 0041 GMT, up from an earlier low of 1,882.52 points.
"Heightening geopolitical risks are pressuring share market, but overall, the market reaction is fairly calm and we are actually seeing foreign investors and pension funds picking up shares amid searches for bargains," said Kwak Joong-bo, a market analyst at Samsung Securities.
Foreign investors were buyers of a net 34.5 billion won ($29.69 million) worth of stocks, and institutions purchased a net 233.5 billion won.
"Historically, negative market impact from North Korea issues will last about five to seven days. I think this will be the case this time, unless we see further aggressions from the North," KWak added.
In 2006, after North Korea's first nuclear test, it took 5 days for the KOSPI to recover losses.
Defence and instant food makers outperformed.
Military equipment producer Victek <065450.KQ> rose 12.6 percent and Huneed TECHNOLOGY [] <005870.KS>, which makes wireless communications equipment for military purposes, jumped 9.5 percent.
Foodmakers advanced on prospects that some citizens were hoarding food, concerned by the outbreak of war on the Korean peninsula. Instant noodle makers such as Nong Shim <004370.KS> rise 1.3 percent.
But shares in companies that have operations in North Korea lost ground.
Shares in Hyundai Merchant Marine <011200.KS>, the flagship unit of Hyundai Group which owns unlisted North Korean tour firm Hyundai Asan, shed 2.2 percent.
Companies that run factories in North Korea such as watch maker Romanson <026040.KQ> retreated 4.2 percent, and apparel producer Shinwon Corp <009270.KS> dipped 3.5 percent on uncertainty over their North Korean business.
But shares in Hana Financial Group <086790.KS> rose 3.5 percent, poised to gain for an eighth consecutive session, after the group decided to buy a controlling stake in Korea Exchange Bank (KEB) <004940.KS>.
Analysts said the Hana-KEB combination would benefit Hana since KEB has few overlaps with Hana's business portfolio. - Reuters
The main KOSPI index was down 1.33 percent at 1,903.14 points as of 0041 GMT, up from an earlier low of 1,882.52 points.
"Heightening geopolitical risks are pressuring share market, but overall, the market reaction is fairly calm and we are actually seeing foreign investors and pension funds picking up shares amid searches for bargains," said Kwak Joong-bo, a market analyst at Samsung Securities.
Foreign investors were buyers of a net 34.5 billion won ($29.69 million) worth of stocks, and institutions purchased a net 233.5 billion won.
"Historically, negative market impact from North Korea issues will last about five to seven days. I think this will be the case this time, unless we see further aggressions from the North," KWak added.
In 2006, after North Korea's first nuclear test, it took 5 days for the KOSPI to recover losses.
Defence and instant food makers outperformed.
Military equipment producer Victek <065450.KQ> rose 12.6 percent and Huneed TECHNOLOGY [] <005870.KS>, which makes wireless communications equipment for military purposes, jumped 9.5 percent.
Foodmakers advanced on prospects that some citizens were hoarding food, concerned by the outbreak of war on the Korean peninsula. Instant noodle makers such as Nong Shim <004370.KS> rise 1.3 percent.
But shares in companies that have operations in North Korea lost ground.
Shares in Hyundai Merchant Marine <011200.KS>, the flagship unit of Hyundai Group which owns unlisted North Korean tour firm Hyundai Asan, shed 2.2 percent.
Companies that run factories in North Korea such as watch maker Romanson <026040.KQ> retreated 4.2 percent, and apparel producer Shinwon Corp <009270.KS> dipped 3.5 percent on uncertainty over their North Korean business.
But shares in Hana Financial Group <086790.KS> rose 3.5 percent, poised to gain for an eighth consecutive session, after the group decided to buy a controlling stake in Korea Exchange Bank (KEB) <004940.KS>.
Analysts said the Hana-KEB combination would benefit Hana since KEB has few overlaps with Hana's business portfolio. - Reuters
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