North Korea launches nuclear missile

Shouldn't affect Asian markets long term

By MSN Money May 26, 2009 1:35PM

Andrew RosenbaumNorth Korea test-fired two short-range missiles today, a day after the country was condemned around the globe for conducting its first nuclear test in three years.

 

The U.N. is reportedly going working toward issuing new sanctions against North Korea as a result of the tests.

Japan's Nikkei 225 Index ($JP:N225) dropped 0.4%, the MSCI Asia Pacific Index was down 0.2%, and Hong Kong's Hang Seng Index ($HSIX) lost 0.8%. South Korea's Kospi Index lost 2.1%.

 

Some analysts were not worried that the tests will affect Asian markets long term, however.

 

"Although the North Korean underground nuclear (test) was indeed worrisome, we do not believe it will have much of an impact on short-term market sentiment since North Korea is not much engaged in commercial trade with the rest of Asia," George Huebsch, head of research at Kim Eng in Thailand, told MarketWatch.

 

Meanwhile, news about the nuclear tests comes as North Korea's leader, Kim Jong Il, is starting a political transition within the country, The Wall Street Journal reported over the weekend. Il's brother-in-law and third son have become key players since Il suffered from a stroke last August.

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