The national police said Saturday they have launched an investigation into an earlier market rumor about a nuclear explosion in North Korea, trying to determine if speculators had intentionally spread the false report to make profits.

The Cyber Terror Response Center at the National Police Agency said the investigation was under way upon request from the Financial Supervisory Service (FSS), the nation's financial watchdog. The rumor spread Friday that a light-water reactor had exploded in North Korea and was leaking radioactive materials that could reach South Korea.

"We received the request late Friday night," a police official said. "We will look into details of the rumor and verify other relevant facts."

According to police, if speculators spread the rumor specifically to disrupt the market and make profits, they may be punished for violating laws guiding capital market and financial investments.

The government quickly dismissed the rumor as groundless, but word spread through instant messenger services among securities brokerages in Yeouido, a major financial district in Seoul, while others tweeted the rumor.

The benchmark Korea Composite Stock Price Index (KOSPI) fell

1.11 percent on Friday, and at one point shed as much as 2.12 percent. The local currency depreciated 0.88 percent to the greenback. (Yonhap News)