Skip to main content

Markets fall on news of Kim Jong Il's death

By Peter Shadbolt, CNN
updated 1:00 AM EST, Mon December 19, 2011
The North Korean flag flies at half-mast above the North Korean embassy in Beijing on December 19, 2011.
The North Korean flag flies at half-mast above the North Korean embassy in Beijing on December 19, 2011.
STORY HIGHLIGHTS
  • Death of North Korean leader rattles markets across the region
  • South Korea's Kospi index slides almost 5% at the open
  • Markets from Australia to Japan also sink on the news
  • Concerns grow over succession struggle in North Korea

Hong Kong (CNN) -- Shares in Asia slumped on Monday on fears the death of North Korean leader Kim Jong Il could lead to instability on the divided Korean peninsular.

South Korea's Kospi Index fell 4.9% to 1,750.60 in mid-morning trading in Seoul before climbing slightly to 1,766,82 to be 4% off by midday.

Key stocks tumbled, with Samsung Electronics, the largest stock on the Kospi, falling 3.5% and LG Display, the world's second largest panel maker, down 7.2% in early trading.

Already battered by fears that possible credit downgrades in European countries could derail a solution to the euro zone debt crisis, Asian markets fell across the board.

Enigmatic North Korean leader Kim Jong Il dies at the age of 69

Asian markets dip after Kim's death

At the open, Japan's Nikkei 225 index was down 1.1 % at 8,304.47, Hong Kong's Hang Seng slid 2.5%t to 17,833.42 and the Shanghai Composite Index fell 2.6% to 2,167.68.

June Park, senior economist at Meritz Securities, told Reuters.com the death of Kim Jong Il had rattled investor confidence.

"This is definitely negative factor for markets with no detailed information on his death. It will drive the stock markets lower and the Korean won to depreciate sharply as geopolitical risks are rising and foreign investors could withdraw money out of South Korea," she said.

With South Korea's military on "high alert" and South Korea's President Lee Myun Bak convening a national security council meeting, Markets in Taiwan, the prospect of further instability caused by succession problems in North Korea also weighed on markets across the region.

Markets in Taiwan, Singapore, Australia, New Zealand and Indonesia also fell.

Chung Young-Tae of the Korea Institute of National Unification was quoted by Reuters.com as saying that while the death was not unexpected, what happens next will be "very important."

While Kim's son, Kim Jong Un, is widely believed to have been groomed as a successor, no official announcement has been made.

"Kim Jong-un is not yet the official heir, but the regime will move in the direction of Kim Jong-un taking center stage," he said. "There is a big possibility that a power struggle may happen.

"It's likely the military will support Kim Jong-un," he added.

ADVERTISEMENT
Part of complete coverage on
updated 7:27 AM EDT, Wed April 2, 2014
Experts warn that under Kim Jong Un's rule, Pyongyang has shown an even greater willingness to raise the stakes than before.
updated 9:14 AM EDT, Tue March 18, 2014
China and North Korea criticize a U.N. report that found crimes against humanity committed in the Democratic People's Republic of Korea.
updated 8:05 AM EDT, Mon March 17, 2014
Megumi Yokota was only 13 when she was abducted by a North Korean agent in the 1970s. What happened after that?
updated 12:30 AM EDT, Wed March 12, 2014
Report: North Korea uses multiple techniques to defy sanctions, and shows no signs of abandoning its nuclear missile programs.
updated 3:17 AM EST, Fri February 21, 2014
Families torn apart for more than 60 years -- separated by the Korean War -- began to reunite at a mountain resort in North Korea Thursday.
updated 6:50 AM EST, Tue February 18, 2014
A stunning catalog of torture and the widespread abuse of even the weakest of North Koreans reveal a portrait of a brutal state, the UN reported.
updated 11:31 PM EST, Mon February 17, 2014
Former prisoners in North Korea describe horrific stories of being tortured by authorities.
updated 10:27 AM EST, Fri February 14, 2014
Skiing is not the first thing that springs to mind when thinking about the isolated nation, but North Korea's ski resort is world class.
updated 10:15 PM EST, Fri February 7, 2014
American Kenneth Bae, who is being held in North Korea, has been moved from a hospital to a labor camp.
updated 9:13 PM EST, Tue January 7, 2014
Why is he being held by North Korea in a prison camp? These are the questions for many since his arrest in the isolated country in 2012.
updated 3:18 AM EST, Mon January 27, 2014
The first time the South Korean factory owner watched his North Korean employees nibble on a Choco Pie, they appeared shocked.
updated 8:26 PM EST, Tue January 7, 2014
Dennis Rodman's "Big Bang in Pyongyang" may be in a league of its own, but other stars too have mixed with repressive regimes before.
updated 1:00 PM EST, Thu December 19, 2013
Former NBA star Dennis Rodman arrives in North Korea to train basketball players, state-run media reports.
updated 9:50 PM EST, Tue December 17, 2013
The nation held a memorial in the honor of former North Korean leader, Kim Jong Il on the second anniversary of his death.
updated 10:58 AM EST, Fri December 13, 2013
Days after he was removed from his powerful military post, Jang Song Thaek was called a traitor and executed.
ADVERTISEMENT