North Korea rains artillery, South retaliates
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Four soldiers were hurt when North Korea launches as many as 200 missiles at the South Korean island of Yeonpyeong. The South immediately returned fire, raising the spectre of war once again between the warring neighbours. Meanwhile, the Korean tension has hit Indian markets, with the Sensex tanking 500 points.
Smoke billows from Yeonpyeong island near the border with North Korea. (AP photo)
Seoul: Four South Korean soldiers were wounded Tuesday when North Korea fired artillery at a South Korean island near the two countries' border in the Yellow Sea, South Korea's Yonhap News Agency reported, citing military officials.
The North fired dozens of rounds, some of which landed on Yeonpyeong island, Yonhap quoted Colonel Lee Bung Woo, spokesman for South Korea's Joint Chiefs of Staff, as saying.
The South returned fire, targeting an artillery position on the North's coast, the Defence Ministry in Seoul said.
Homes were damaged on Yeonpyeong, South Korea's YTN television said.
About 1,000 South Korean soldiers are stationed on the island, which lies 12 km from North Korea's coast. It has been a source of tension between the two neighbours because of its location and rich fishing grounds, and naval clashes have occurred nearby.
Relations between Seoul and Pyongyang have deteriorated this year after a South Korean warship sunk in March in the Yellow Sea also near the inter-Korean border. Forty-six sailors were killed. Seoul blamed Pyongyang for their deaths, but the North has denied involvement.
South Korean President Lee Myung Bak called an emergency meeting of ministers with security-related portfolios to discuss how to respond to the fire while a Unification Ministry official told Yonhap that the South was considering evacuating its citizens out of North Korea.
Few foreigners visit isolated, Stalinist North Korea, but South Koreans work there at an industrial park operated by both Koreas at the border town of Kaesong and at the Mount Kumgang resort.
Meanwhile, Indian shares fell more than 2 percent in afternoon trade on Tuesday, in what traders called a knee-jerk reaction to North Korea firing dozens of artillery shells at a South Korean island.
"It's a knee-jerk reaction to the tense situation in Korea," said KK Mital, head of portfolio management services at Globe Capital in New Delhi. "If the situation escalates, then we will see a sharp impact on the markets in the region."
At 1:13 pm, the benchmark 30-share Bombay Stock Exchange was trading down 590.56 points at 19392.51, with all of its components declining. Nifty was down 136.40 points to 5873.60.
All of the sectoral indices were in the negative. Realty, metal and auto stocks were among the major losers, while some IT stocks were trading weak as well.
The only gainer on the Sensex was Hindustan Unilever. Among losers were Hindalco Industries , SBI, Sterlite Industries and Tata Power.
Seoul shares fell as news crossed the wire during the final few minutes of trade that North Korea had fired dozens of artillery shells at a South Korean island.
Even before that, the index had turned lower as investors sought to reduce risk in their portfolios amid growing European debt worries.
The Korea Composite Stock Price Index ( KOSPI) ended down 0.79 percent at 1,928.94 points.
"This is not good. The aggression was on a residential area, occupied by civilians," said Han Beom-ho, a market analyst at Shinhan Investment Corp.
North Korea on Tuesday fired dozens of artillery shells at a South Korean island, setting buildings on fire and prompting return fire by the South, Seoul's military and media reports said.
"The market will start off badly tomorrow for sure...South Korea's geopolitical risks are again heightened," Han added.
While the shelling dampened overall market sentiment, some defence shares rose, with military equipment producer Victek jumping 4.7 percent.
The market moved sideways during most of the trade as investors were reluctant to make bets at the index's current level, and before examining US post-Thanksgiving retail sales on Friday, according to Kim Seong-bong, a market analyst at Samsung Securities.
Hyundai Motor shares fell 3 percent on concern that deepening labour disputes could lead to production disruptions at South Korea's largest automaker.
Meanwhile, Shares of Kia Motors ended down 1.6 percent.