South Korea's stock market plunged by 2 percent on Friday as investors fret over heightening military tension on the Korean Peninsula and growing uncertainties over the global economy, with the Korean won hitting a fresh four-year low against the U.S. dollar, analysts said.
  
The benchmark Korea Composite Stock Price Index retreated 38.48 points, or 2.01 percent to close at 1,876.07, the lowest closing since July 18, 2013. Trading volume was moderate at 504.1 million shares worth 6.75 trillion won (US$5.65 billion) with decliners far outstripping gainers 747 to 96.
  
The tech-laden secondary KOSDAQ also tumbled 4.52 percent to finish at 627.05.
  
Analysts said the latest military provocation by Pyongyang caused the jolt, prompting investors to dump local equities.

However, the North Korea-related risk is expected to be short-lived, as past military conflicts with Pyongyang have had a limited impact on the local financial market.
  
The KOSPI started off with a fall of some 3 percent at the opening bell, but pared its losses later in the session.
  
Instead, they gave more weight to concerns over a global economic slowdown, as the world's two major economies -- China and the U.S. -- do not show a clear sign of recovery ahead of the Fed's crucial rate-setting meeting next month.
  
"What the market is most afraid of is uncertainties, when they can't figure out whether it would happen or not. That's when they avoid taking risks. And this is exactly what they feel about the U.S. monetary policy," Kim Dae-jun, an analyst at Korea Investment & Securities Co.
  
China's latest manufacturing index added to such growing concerns over the stagnating global economy. China's PMI Index came to 47, the lowest since 2009, underscoring that the world's No. 2 economy may be heading for a further downturn.
  
On the Seoul main bourse, foreigners continued to dump shares for a 12th consecutive day, worth a net 442 billion won Friday, with individuals also unloading a net 533.5 billion won.
  
Institutions scooped up a net 919.1 billion won, as they tried to prop up the index.
  
Shares lost ground across the board, driven by top-listed firms.
  
Market bellwether Samsung Electronics slumped 3.34 percent to 1,101,000 won and top automaker Hyundai Motor dipped 2.01 percent to 146,000 won.
  
In contrast, domestic-focused shares ended higher. Amore Pacific, a leading cosmetics maker, climbed 1.18 percent to 344,000 won, while nonlife insurer Samsung Fire & Marine Insurance added 0.4 percent to 269,000 won.    
  
The local currency ended at 1,195.00 won, down 9.9 won from Thursday's close, the lowest since September 2011, on concerns that foreign investors may continue to pull out of the local bourse.
  
The won declined to the 1,190.00-won mark again, nine days after it dipped to that level following the consecutive yuan devaluations by China's central bank. (Yonhap)