Heightened tensions between North Korea and the US are negative factors in the local stock markets that could drag down the index, Cape Investment & Securities said in a report. It said the local stock markets could quickly rebound if tensions ease.

US President Donald Trump ratcheted up tensions with North Korea Friday, saying the military is “locked and loaded” to deal with North Korea‘s provocations.

“Military solutions are now fully in place, locked and loaded, should North Korea act unwisely,” he tweeted. “Hopefully Kim Jong Un will find another path!”

North Korea and the United States have traded bellicose rhetoric after the United Nations Security Council further tightened sanctions on North Korea for its two tests of intercontinental ballistic missiles last month.

Ryu Yong-seok, a market analyst at KB Securities Co., said North Korea risks could continue to weigh in the main index, though there are no negative factors that could undermine South Korea’s economic fundamentals.

On Friday, foreign investors offloaded shares worth more than 648 billion won ($566 million), while institutions scooped up more than 678 billion won. (Yonhap)