Asian stocks plummet after the death of the North Korean dictator, Kim Jong-Il, with South Korean shares being the hardest hit.
Kim Jong-Il's death roils markets
The death of North Korea's dictator Kim Jong-Il sent Asian stocks into a tailspin, as investors feared the impact of a transition of power in the nuclear-armed country.
Mr Kim died of a heart attack on Saturday, the Korean Central News Agency said in a statement.
Stocks plunged after the news emerged, with stocks across the demilitarised zone in neighbouring South Korea hardest hit. The country's KOSPI Index fell 3.4 per cent to 1,776.93, at one point falling as low as 4.8 per cent, while the won fell 1.5 per cent against the US dollar.
Shares in some of South Korea's biggest companies, including Samsung Electronics, Hynix Semiconductor, and LG Electronics, fell sharply. Meanwhile, stocks in Samyang Foods, a noodle producer, shot up by 14 per cent.
The Hang Seng Index fell 1.6 per cent to 17,983.40, while Japan's Nikkei 225 index lost 1.2 per cent to 8,296.12. In Singapore, the FTSE Straits Times Index fell 1.4 per cent to 2,620.68.
Investors were fearing the impact of geopolitical moves in the Korean peninsula during the coming days, said Chung Yun Sik, chief investment officer for equities at ING Investment Management Korea, which oversees around $16 billion.
"We saw panic selling today amid concerns tensions on the Korean peninsula may intensify," he told Bloomberg News.
"If China comes out this time and gives supporting comments for Kim Jong Un as successor, I think South Korean financial markets will quickly stabilise."