S Korean shares dip on nuclear threat

SINGAPORE, Oct 4: South Korean shares fell on Wednesday after North Korea said it planned to conduct its first nuclear test, while oil slumped to a 7-{ month low driving down energy shares across Asia.

But Tokyo's Nikkei average ended the morning session in positive territory, riding a wave of U.S. optimism after the blue-chip Dow Jones industrial average hit a record high.

The dollar edged towards a 5-{ month high against the yen and the euro hit a one-month peak against the Japanese currency as investors used a jump in tensions over North Korea as an excuse to sell.

In South Korea, market heavyweight Samsung Electronics fell 1.2 percent while steel maker POSCO was down 0.62 percent, knocking the key KOSPI index down 0.83 percent at 0226 GMT.

''This (nuclear) threat has hung over the market for some time, but this time it's different. At least sentiment-wise, we're bound to see some kind of impact,'' said Kim Joong-hyun, an analyst at Goodmorning Shinhan Securities.

South Korea has heightened its security alert following its neighbour's announcement on Tuesday and the United States, France and Japan have urged the U.N. Security Council to respond.

Oil prices slid further in Asian trade, extending a near 7 per cent slide over the previous two days, but gold steadied after falling more than 3 percent on Tuesday. Copper prices have also been hit by oil's decline.

Benchmark U.S. crude, which fell more than

SINGAPORE, Oct 4: South Korean shares fell on Wednesday after North Korea said it planned to conduct its first nuclear test, while oil slumped to a 7-{ month low driving down energy shares across Asia.

But Tokyo's Nikkei average ended the morning session in positive territory, riding a wave of U.S. optimism after the blue-chip Dow Jones industrial average hit a record high.

The dollar edged towards a 5-{ month high against the yen and the euro hit a one-month peak against the Japanese currency as investors used a jump in tensions over North Korea as an excuse to sell.

In South Korea, market heavyweight Samsung Electronics fell 1.2 percent while steel maker POSCO was down 0.62 percent, knocking the key KOSPI index down 0.83 percent at 0226 GMT.

''This (nuclear) threat has hung over the market for some time, but this time it's different. At least sentiment-wise, we're bound to see some kind of impact,'' said Kim Joong-hyun, an analyst at Goodmorning Shinhan Securities.

South Korea has heightened its security alert following its neighbour's announcement on Tuesday and the United States, France and Japan have urged the U.N. Security Council to respond.

Oil prices slid further in Asian trade, extending a near 7 per cent slide over the previous two days, but gold steadied after falling more than 3 percent on Tuesday. Copper prices have also been hit by oil's decline.

Benchmark U.S. crude, which fell more than $2 on Tuesday, was trading at $58.42 a barrel at 0212 GMT, the lowest since mid-February.

The price of oil has been pressured by ample fuel stocks in top consumer the United States and no evidence that other OPEC members are joining Nigeria and Venezuela in cutting output.

Energy shares such as Japan's INPEX Corp. and Nippon Mining Holdings Inc., an oil refiner and copper smelter, as well as Australia's Woodside Petroleum and mining giant BHP Billiton dropped between 2-6 percent.

Spot gold was trading at $577.20/578.20 an ounce, up slightly from $576.50/577.50 late in New York on Tuesday.

DOW BOOST The dollar rose to around 118.05 yen from around 117.95 in late New York on Tuesday, edging back towards 118.39 traded on Monday, which was it highest level since mid April.

The euro rose to a one-month high around 150.45 yen, in sight of its record high against the Japanese currency of 150.73 traded in late August.

''North Korea's nuclear test talk was taken as an incentive to sell the yen as the yen remains under strong selling pressure on views that Japanese interest rates will stay very low,'' said a trader at a Japanese bank.

U.S. stock investors bet on Tuesday that sliding crude oil prices would stimulate consumer spending, sending the Dow Jones industrial average to a record intraday high and close to cross a threshold set in January 2000.

The Dow's rise propelled the Nikkei up 0.13 percent in morning trade. Japanese blue-chip stocks such as Canon Inc. and Toyota Motor Corp. up between 1.3-1.7 percent, while Nintendo Co. Ltd. jumped around 4 percent after raising its income forecast.

''A record Dow doesn't mean everything, but means something to investors,'' said Masatoshi Sato, a senior strategist at Mizuho Investors Securities. ''They seem to feel more comfortable to buy blue-chip stocks here than before,'' he said.

The Dow's record-breaking rally also cheered investors in Hong Kong, where the main index was up 0.15 percent at 0225 GMT, but Taiwan and Australia stocks were trading lower.

Japanese government bonds were little changed, with investors taking small profits from the previous day's gains while keeping a wary eye on stocks after the Dow's rise.

The benchmark 10-year JGB yield was unchanged at 1.695 percent, after rising to 1.740 percent on Monday, its highest level in more than three weeks.

REUTERS

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on Tuesday, was trading at .42 a barrel at 0212 GMT, the lowest since mid-February.

The price of oil has been pressured by ample fuel stocks in top consumer the United States and no evidence that other OPEC members are joining Nigeria and Venezuela in cutting output.

Energy shares such as Japan's INPEX Corp. and Nippon Mining Holdings Inc., an oil refiner and copper smelter, as well as Australia's Woodside Petroleum and mining giant BHP Billiton dropped between 2-6 percent.

Spot gold was trading at 7.20/578.20 an ounce, up slightly from 6.50/577.50 late in New York on Tuesday.

DOW BOOST The dollar rose to around 118.05 yen from around 117.95 in late New York on Tuesday, edging back towards 118.39 traded on Monday, which was it highest level since mid April.

The euro rose to a one-month high around 150.45 yen, in sight of its record high against the Japanese currency of 150.73 traded in late August.

''North Korea's nuclear test talk was taken as an incentive to sell the yen as the yen remains under strong selling pressure on views that Japanese interest rates will stay very low,'' said a trader at a Japanese bank.

U.S. stock investors bet on Tuesday that sliding crude oil prices would stimulate consumer spending, sending the Dow Jones industrial average to a record intraday high and close to cross a threshold set in January 2000.

The Dow's rise propelled the Nikkei up 0.13 percent in morning trade. Japanese blue-chip stocks such as Canon Inc. and Toyota Motor Corp. up between 1.3-1.7 percent, while Nintendo Co. Ltd. jumped around 4 percent after raising its income forecast.

''A record Dow doesn't mean everything, but means something to investors,'' said Masatoshi Sato, a senior strategist at Mizuho Investors Securities. ''They seem to feel more comfortable to buy blue-chip stocks here than before,'' he said.

The Dow's record-breaking rally also cheered investors in Hong Kong, where the main index was up 0.15 percent at 0225 GMT, but Taiwan and Australia stocks were trading lower.

Japanese government bonds were little changed, with investors taking small profits from the previous day's gains while keeping a wary eye on stocks after the Dow's rise.

The benchmark 10-year JGB yield was unchanged at 1.695 percent, after rising to 1.740 percent on Monday, its highest level in more than three weeks.

REUTERS

Related Stories
UN chief concerned about N Korea's nuke test