The worst earthquake in Japanese history has increased the fears of a dip in the South Korean market and in conjunction with the unrest in the Middle East. On top of that, Japan is facing the worst nuclear accident since the 1986 Chernobyl explosion, which could trigger a sharp drop in shares of nuclear plant builders.
Japan's most powerful earthquake since records began has struck the north-east coast, triggering a massive tsunami.
The quake was the fifth-largest in the world since 1900 and nearly 8,000 times stronger than the one which devastated Christchurch, New Zealand, last month, said scientists.Historically, Japan is one of the most earthquake-prone regions of the world. More than 440 severe earthquakes have been recorded in detail since Aug. 23, A.D. 416, when court chroniclers first wrote of one in the ancient capital of Asuka in central Japan.
Korea does not feel many earthquakes, especially compared to other active countries. And most of the tremors on the peninsula are moderate in magnitude on the Richter scale, which is used to measure a quake's energy. The tremors that have been recorded here in Korea are rare and not near as devastating as the 8.9 magnitude quake that hit Japan last week. Following the 1995 earthquake in Kobe, Korea set up its first earthquake response plan in 1996.
The government and economists in Seoul are yet to assess the exact local impact of the damage in the country's second-largest trading partner. "Seoul shares are set to open lower on Monday, with investors likely to remain cautious as they await details of the impact of a deadly quake and tsunami in Japan and a possible nuclear power crisis," analysts said.
"The market will start off weak. Historically, the South Korean market has responded negatively to natural disasters in neighboring countries," said Yoo Soo-min, a market analyst at Hyundai Securities. Yoo added, "Air carriers and tourism issues in particular would be hit with passenger traffic to and from Japan set to fall. However refiners, automakers, and technology issues may be lifted on expectations of tighter product supply."
Also, on the wake of the deadly quake/tsuami shipbuilders including Hyundai Heavy and air carriers tumbled. Plus, the Korea Composite Stock Price Index (KOSPI) was down 0.73 percent at 1,941.23 points. However, Hynix and Hyundai Motor advanced firmly following news of production disruption by its Japanese peers. Steelmakers also jumped on expectations of higher demand.