Asia-Pacific Shares Plunge as Uncertainty Weighs Over Reports North Korea’s Kim Jong Un is Ill
The major Asia-Pacific stock indexes fell early Tuesday amid uncertainty over the health of North Korean leader Kim Jong Un. CNN reported Tuesday, citing an unnamed U.S. official with direct knowledge, that Washington is “monitoring intelligence” that Kim is in “grave danger after a surgery.”
The breaking news fueled a series of moves in financial markets around the world. Asia-Pacific benchmarks in Seoul, Sydney and Shanghai fell over 1.50% and Hong Kong more than 2%. U.S. futures surrendered early gains. While the Japanese Yen traded flat, safe-haven buying helped boost the U.S. Dollar against most major currencies. U.S. Treasuries were little changed.
At 05:07 GMT, Japan’s Nikkei 225 Index is trading 19281.79, down 387.33 or -1.97%. Hong Kong Hang Seng Index is at 23772.36, down 557.66 or -2.29% and South Korea’s KOSPI is trading 1867.23, down 31.13 or -1.64%.
China’s Shanghai Index is trading 2813.95, down 38.60 or -1.35% and Australia’s S&P/ASX 200 Index is trading 5266.10, down 86.90 or -1.62%.
North Korea’s Kim Jong Un in Critical Conditions
The U.S. has information that North Korea’s Kim Jong Un was in critical condition after undergoing cardiovascular surgery last week, Bloomberg reported. CNN said America has intelligence that he’s in grave danger. Yonhap reported that South Korea denied the media reports.
“The uncertainty about who succeeds him in North Korea is the great unknown,” said Jeffrey Halley, senior market analyst at Oanda Asia Pacific, conjecturing about a potential worst-case scenario for Kim. “That’s what is making markets nervous,” he said.
South Korean Won, Shares Exposed to North Korea Fall
South Korean shares exposed to North Korea tumbled on multiple reports that North Korean leader Kim Jong Un may be ill, even as the South Korean government said he was not.
Shares of Hyundai Elevator are trading nearly 5% lower while Ananti dropped 3%. They are heavily exposed to events related to North Korea as they had invested in the isolated nation’s tourist spots.
Shares of defense companies Victek Co. and Hanwha Aerospace are surging 25% and 9%, respectively.
The Korean Won fell immediately after the CNN report, and traded down more than 1% against the dollar even as two South Korean government sources later confirmed that Kim was not gravely ill.
Virgin Australia Announces Voluntary Administration
On the corporate news front, Virgin Australia announced Tuesday that the firm has entered voluntary administration to “recapitalize the business and help ensure it emerges in a stronger financial on the other side of the COVID-19 crisis.” That comes as the airline sector has taken a huge beating from the coronavirus pandemic, with travel heavily restricted as authorities globally race to stem the virus’ spread.
This article was originally posted on FX Empire
More From FXEMPIRE:
GBP/USD Daily Forecast – U.S. Dollar Gains Ground On Increased Demand For Safe Haven Assets
AUD/USD and NZD/USD Fundamental Daily Forecast – Drop in Demand for Risk Pressuring Aussie, Kiwi
Gold Price Prediction – Prices Move Higher in Sideways Trade
EUR/USD Daily Forecast – Dollar Creeps Higher and Hints of a Bullish Continuation
Sovereign External Risk Ranking 2020: Covid-19 Lays Bare Country Risks to External Shocks