N. Korea-related stocks plunge, defense stocks rise on summit breakdown

(Yonhap)

Share prices of North Korea-related businesses on the Seoul bourses took a brutal hit Thursday on news of failed nuclear negotiations between the US and North Korea, while defense shares surged.The South Korean stock market and the won plunged Thursday, with the benchmark Kospi closing 1.8 percent lower from the previous closing, the biggest one-day fall since Oct. 23, and the won slipping 0.5 percent against the US greenback.Once soaring shares of South Korean firms with business ties to the North took a dive, including those of hotel and resort operator Ananti, which dropped 25.83 percent to 31,100 won ($27.67) per share.A slew of companies that used to operate factories in the now-shuttered Kaesong industrial zone also saw a slide in share prices, as hopes of dramatic progress in inter-Korean economic cooperation dwindled.Goodpeople, an underwear maker, slipped 25.43 percent to 4,750 won per share, while shares of auto-parts supplier Jaeyoung Solutec dropped 18.69 percent to 1,240 won.Meanwhile, shares of Viktek, which manufactures military power supplies, jumped 25.25 percent to 3,100 won. Analysts have pointed out that increased political and diplomatic uncertainty often prompts investors to purchase defense shares.The much-anticipated summit between US President Donald Trump and North Korean leader Kim Jong-un in Hanoi abruptly ended with a no deal on Thursday, immediately triggering sell-offs by offshore traders and individual investors. South Korean markets are closed Friday for a public holiday.By Jung Min-kyung ( mkjung@heraldcorp.com