Norths shelling jolts S. Korean financial markets

Local stock and foreign exchange markets took a deep dive Wednesday as North Korea's military provocation scared investors away from the country.

The benchmark Korea Composite Stock Price Index (KOSPI) traded at 1,907.17 as of 9:32 a.m., down 1.13 percent from Tuesday's close in the first session after the North's artillery attack.

The Korean currency was changing hands at 1,155.2 won to the U.S. dollar as of 9:32 a.m., down 17.7 won from Tuesday.

The Korean won slid below the 1,150 won level for the first time since closing at 1,155.2 against the greenback on Sept. 24.

Geopolitical tension escalated on the Korean Peninsula after North Korea a day earlier shot a barrage of artillery rounds onto Yeonpyeong Island, a South Korean island located in the sea border with the communist country.

South Korea fired back and immediately responded to the attack on the populated island, which left two South Korean marines killed, dozens wounded and scores of civilian houses and government offices ablaze.

The foreign ministry of the South defined the attack as the North's "clear provocation" that violated multiple agreements between the two separated nations.

The two Koreas technically remain at war since the 1950-53 Korean War ended in a truce rather than a peace treaty.

Financial authorities, however, reassured investors that the geopolitical risk may only have a limited impact on the local financial sectors due to the country's solid economic conditions.