Kim Jong Il's Death: World Stocks Jolted By Potential Political Instability

HONG KONG — Asian stocks bounced back Tuesday as fears receded of political turmoil in the region following news of North Korean leader Kim Jong Il's death the day before.

Investors appeared relieved that Kim's death from a heart attack had not triggered an immediate crisis over a leadership succession in the isolated nation known to be pursuing nuclear weapons.

North Korea's neighbors worry that internal political maneuvering could spill over into missile launches or other aggression, though analysts give such acts a low probability.

Asian markets also shrugged off news that European Union finance ministers raised only three-quarters of the euro200 billion ($261 billion) that they wanted to provide the International Monetary Fund to help heavily indebted nations avoid default.

Countries that use the euro are hoping the extra IMF loans – meant to be channeled into a special fund that will invest alongside Europe's own bailout fund – will encourage other non-European countries to provide support for Europe via the IMF.

South Korea's Kospi led regional gains, up 0.7 percent to 1,789.02 a day after tumbling 3.4 percent on news of Kim's death.

Japan's Nikkei 225 index rose 0.6 percent to 8,350.12, Hong Kong's Hang Seng climbed 0.5 percent to 18,159.05 and the Shanghai Composite Index advanced 0.2 percent to 2,223.60.

Benchmarks in Taiwan, Singapore and Australia also rose.

Trading was thin in many markets ahead of the Christmas holidays.

In New York on Monday, the Dow Jones industrial average lost 0.8 percent to close at 11,766.26. The Standard & Poor's 500 index fell 1.2 percent to 1,205.35. The Nasdaq composite index fell 1.3 percent to 2,523.14.

In currencies, the euro fell to $1.3000 from $1.3017 late Monday in New York. The dollar strengthened to 78.01 Japanese yen from 77.95 yen.

Benchmark oil for January delivery was up 47 cents at $94.35 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 35 cents to settle at $93.88 per barrel on Monday.

Comments

[authorized-user]

09:56 AM on 12/20/2011

Will China continue to support this regime?

[pinetrale]

10:38 PM on 12/19/2011

because a sadistic blackmailing warmonger dictator who tortures and destroys the lives of his own people and sells weopons tehnology to rogue states that also oppress their own people dies, the stock market goes down????

[sking007]

10:18 PM on 12/19/2011

Never mind the stability of North Korea. It seems when anyone farts world stocks are impacted. Talk about instability.

[ajustman]

04:50 PM on 12/19/2011

Here is an idea: maybe regulate the stock market back to what it is suppose to be doing. Send all the brokers to Alabama to pick vegetables.

[alhorvath]

04:47 PM on 12/19/2011

Not saying much about the world's stock markets. North Korea is a nothing. It is failed marxist state with a royal family that can't even feed its own people.

[ajustman]

04:47 PM on 12/19/2011

The market has been going up and down now for a long time and will continue to do so until there is somewhere else to put the money that will pay off. The answer to that is to raise the interest rates slowly. If business is bad because people don't have money no one is going to buy anything and businesses are not going to expand. Just go back some years and see what what things were like and readjust to get back there and then see what happens. We need to do the opposite of what we are doing now.I don't care what the bank rates are in terms of borrowing. I can't pay it back.

[gehrig1b]

02:26 PM on 12/19/2011

From the looks of his picture, it appears that Kim Jong Un should be able to rule from two locations simultaneously: he from one spot, and his chin from another.

[AVoiceInThe Darkness]

01:59 PM on 12/19/2011

If the stock market is really this sensitive then there is no reason to ever trust it with investments in the first place. No, it's an average that reacts and it makes good copy to say why and to act like it's important.

[ajustman]

04:53 PM on 12/19/2011

You can't trust the market anymore. Wall street tells government that they have to operate this way or the world economy will crash. Of course they won't be able to make billions either. Our generation is screwed because no one in washing was paying attention. Watch Corzine walk away free (with 100 million )

[cadawa]

01:45 PM on 12/19/2011

'Absolute dictator'? Perhaps. The US has a similar problem to North Korea when it comes to leadership.
Ours consistently rules for a tiny minority and against public opinion, can lock you up and throw away the key, assassinate you, spy on you etc. Isn't this a case of the pot calling the kettle black?

[Alex Posa]

02:07 PM on 12/19/2011

I get your point, but your comment understates the severity of North Korea's government's cruelty. Much of the populace lives in absolute terror. We don't have a national dress code or music to wake us up every day. We don't eat clay and tree bark to survive because our government's greatest project (a massive dam) ruined arable land. There aren't labor camps for political prisoners.
You should check out some documentaries by visitors to DPRK. The choreography in Pyongyang for foreign visitors is astounding. They spend massive amounts of money for a futile PR campaign while millions starve.

[cadawa]

02:25 PM on 12/19/2011

Thank you for conceding the point. I appreciate the civil tone of your comment and understand what you are saying BUT...ten years ago could you have dreamed that things would have gotten this bad, this fast? I don't know about the tree bark but many people in this country are hungry, many are children.
A lot of arable land has been ruined here as well by government subsidized corporate interests, shopping malls and cheesy housing developments.
We have political prisoners as well. Bradley Manning comes readily to mind. Guantanamo, Bagrham, Romania......
The militarization of the police force, the suspension of Posse Comatatis, the power the president has grabbed to assassinate, torture or detain you without any due process should have you concerned.
North Korea didn't start out being our enemy. We attacked them during the senseless cold war.
Since then, the state sponsored press has worked overtime to demonize them, most recently the PNAC doctrine that identifies them as part of the 'axis of evil'.

[ajustman]

04:34 PM on 12/19/2011

Yes I feel sorry for them maybe it will turn around now

[alhorvath]

04:48 PM on 12/19/2011

You really need to have your head examined, Soon!

[cadawa]

08:06 PM on 12/19/2011

anger management problems?

[GaryNOVA]

01:44 PM on 12/19/2011

Christopher Hitchens, Kim Jong Il aaaaaaand...


who's going to complete the death trifecta?

[Alex Posa]

01:57 PM on 12/19/2011

The Iraq War.

[American In Chicago]

01:24 PM on 12/19/2011

If we had that transaction tax in place, Americans would at least be getting something out of reflexive market spasms like this.

Don't forget to remind your Congressperson that you expect it to pass.

[jbad]

01:24 PM on 12/19/2011

This author dn know what he's talking about. The markets have done nothing in response to Kim Jong Dong's death other than the asians bordering his country. The markets show nada, zip, zilch. How could it ? N. Korea produces virtually nothing so it exports nothing. As far as imports from China or Russia, good luck w that. The only thing the markets would respond to is troop manuvers or more missle tests as well as NATO response to such.

[erl92]

01:13 PM on 12/19/2011

The whole stock market system is a game of speculation so people who produce nothing and do nothing of any value can make money by not working. There will be no shortage or abundance of anything in the world as the result of his death.

[santacruzbluz]

02:41 PM on 12/19/2011

Soon the prisons will be full of Wall Street types, and they will wonder what in the world happened to them.

[erl92]

06:34 PM on 12/20/2011

I look forward to that.

[Ivar Anderson]

01:12 PM on 12/19/2011

Any reason to cause market instability.

Dance, puppets. Dance.

[Archie Bonker]

01:08 PM on 12/19/2011

Who cares ?