Jan 6, 2012, 10:49 GMT
Seoul - Shares in Seoul dipped more than 2 per cent on Friday after rumours circulated of an accident at a North Korean nuclear facility, as authorities announced an investigation.
South Korean authorities were quick to dismiss the rumours that a light-water reactor had exploded at the Yongbyon facility in the North, releasing radioactive material.
The Kospi Index recovered in later trading to close at 1843.14, or 1.1 per cent down. The won dipped nearly 1 per cent to 1,163.15 to the dollar, before closing at 1,162.75 to the dollar.
No increased radiation was detected by South Korean sensors, and no tremors in the area were picked up by geological monitoring stations.
In Vienna, and official from the International Atomic Energy Agency (IAEA) said: 'We have not been informed of anything.' North Korea is not a member of the IAEA.
South Korea said last month its regulators would keep a closer eye on market speculation that could be linked to potentially destabilizing news from the country's reclusive, nuclear-armed northern neighbour.
The Kospi fell 3.4 per cent on December 19 when the death of North Korean leader Kim Jong Il was made public.
On December 27, rumours about the health of his successor and son Kim Jong Un, and about Chinese plans to send troops to North Korea, prompted stocks in Seoul to tumble, before recovering over the following two days.
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