Growing tensions on the Korean peninsula pummelled South Korea’s currency and stock market on Tuesday, with investors taking fright at a report that Kim Jong-il, the North Korean dictator, had put his million-man army at battle stations.
Seoul has accused Mr Kim of ordering a submarine to sink a South Korean warship with a torpedo on March 26, killing 46 sailors. North Korea denies the charge.
South Korea’s won extended losses to a 10-month low against the dollar, touching Won1,272 per dollar in mid-morning trade, down 4.7 per cent from Monday’s close.
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