Asian Stocks Fall After North Korea’s Leader Dies

Posted December 19th, 2011 at 11:30 am (UTC-5)
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The death of North Korea's leader, Kim Jong-il, is having a limited impact on global stocks and other economic activities on Monday.

The Fitch Rating agency said it is watching the situation closely, but does not see a need to cut neighboring South Korea's credit rating at this time.

Many major Asian stock markets declined after Kim's death was announced, with South Korea's key index off a sharp 3.4 percent at the close of Monday's trading. U.S. and European stocks were either up or mixed in later trading.

North Korea is one of the most isolated nations on Earth and plays only a small role in global commerce. North Korea's dysfunctional economy has been hampered by sanctions, natural disasters and mismanagement and has needed foreign aid to feed its people. In spite of famine, the government has poured resources into nuclear weapons development.

The decline in Asian stocks reflects investor concern about uncertainties surrounding the leadership succession in the profoundly secretive, nuclear-armed country, which borders economic powers South Korea, China and Russia, and is a short distance from Japan.

Those concerns helped the U.S. dollar rise as investors sought a safe haven for their money.