By Kim Jae-kyoung
Staff Reporter
The Korean financial market underwent a roller coaster ride Monday on the North Korea's nuclear test and missile launch but ended up shrugging off the provocative action and closing marginally lower than the previous close.
The benchmark KOSPI closed at 1,400.9, down 2.85 points or 0.2 percent from Friday, while the tech-heavy Kosdaq fell by 12.01 points or 2.17 percent to 542.08. The local currency lost 1.6 won to end at 1,249 won per dollar.
The North's nuclear test sent a shudder through the financial market at first, with the KOSPI once dipping by 88.54 points to a daily low of 1,315.21, sending the Korean won to 1,269.4 won per dollar.
But the local market regained stability and recovered most of its earlier losses, as investors gauged the nuke threat as ``short-lived'' after global ratings agencies, including Standard & Poor's (S&P) and Fitch Ratings, announced that the action would have no immediate impact on South Korea's sovereign ratings.
The ratings agencies have maintained that a nuclear test could escalate geopolitical risks on the Korean Peninsula but chances were slim that they would adjust the sovereign rating because of that as such risks are already factored in.
Following the North's first long-range Taepodong-2 missile launch in April, Tom Byrne, senior vice president at Moody's Investors Service, said, ``We have already factored into the rating a degree of event risk from unpredictable developments arising from geopolitics on the Korean Peninsula.''
Market experts said that the death of former President Roh Moo-hyun is also unlikely to affect the Korean economy and financial market.
``Roh's death should not have a major impact on the economy,'' Marcus Noland, senior fellow at the Peterson Institute for International Economics, told The Korea Times.
``As a former President, and one under legal pressure, he had no real political influence or impact on policy. So while President Roh's death is shocking, it should not have an impact on the markets or the economy,'' he added.