October 10, 2006	Tuesday	Ramazan 16, 1427

HONG KONG, Oct 9: Asian stocks tumbled on Monday after North Korea defied international pressure and announced it had conducted a nuclear test, realising the region's worst fears.

Dealers said, however, that investors regained some composure in late trade to allow stocks to finish off their early lows as the test sparked concerns over regional security and a likely sharp increase in tensions amid world-wide condemnation.

In South Korea, the KOSPI index was down 2.41 per cent after recovering from a near four percent slump. The damage was also likely muted as Tokyo was closed Monday for a public holiday, limiting the immediate impact.

The won also fell sharply -- from 949 Friday to around 963 against the dollar as investors dumped the local currency in reaction to North Korea's announcement that the test was carried out.

Asian currencies were also generally lower as investors sought out the dollar as a traditional safe-haven, with further turbulence expected as the story unfolds.

South Korean financial markets are most at risk, given that technically the country remains at war with North Korea following the 1950-53 war, with Tokyo next in line as most exposed to any shocks.

In Hong Kong the benchmark slumped 1.27 per cent, Singapore fell 1.1 percent and Sydney recovered some ground to close down 0.41 percent. Losses were relatively modest in Jakarta, Bangkok, Kuala Lumpur, Mumbai and Manila.

Meanwhile, Chinese share prices were higher -- despite Beijing's strong condemnation of the test -- but investors there are infamous for ignoring international events as capital controls tend to insulate the market.

HONG KONG: Share prices closed sharply lower, down 1.27 per cent, after North Korea announced it had conducted a nuclear test, sparking concerns over regional security and the prospect of heightened political tensions.

The Hang Seng Index closed down 228.15 points at 17,675.24. Turnover was 30.45 billion Hong Kong dollars ($3.9 billion).

“News of a nuclear test by North Korea triggered a correction in the market,” said Kenny Tang, associate director at Tung Tai Securities.

The market “is likely to remain a bit volatile at least in the near term amid worries over regional security,” he said.

But I believe ongoing tension in Korea would have limited impact on Hong Kong in view of local factors including ICBC's IPO (initial public offering) due in the next two weeks,” he said.

SYDNEY: Shares prices closed 0.41 per cent lower as sentiment was shaken by North Korea's nuclear test. Dealers said investors were hesitant after the news, wanting to see how the major markets in Europe and the United States will react.

The SP/ASX 200 fell 21.6 points to 5,199.1. Turnover was 1.05 billion shares worth 3.18 billion dollars (2.3 billion US).

SINGAPORE: Share prices closed 1.1 percent lower in a sharp drop sparked by North Korea's announcement of a nuclear test.

The Straits Times index lost 27.79 points at 2,621.51. Volume was 1.19 billion shares valued at 972.85 million Singapore dollars (612 million US).

KUALA LUMPUR: Share prices closed 0.17 per cent lower in rangebound trade despite sharp falls elsewhere in the region following North Korea's nuclear test.

The composite index lost 1.60 points to 969.38. Trading volume was 489.82 million shares valued at 712.61 million ringgit (193 million dollars).

JAKARTA: Share prices closed 0.40 per cent lower amid a sell-off in most regional markets as investors reacted with alarm to North Korea's announced nuclear test.

The composite index closed down 6.205 points at 1,543.424 on volume of 1.41 billion shares valued at 1.51 trillion rupiah (163 million dollars).—AFP