Article first published as Koreaâ€™s Fire Exchange, EU Debt Worries Pull Down Shares Around the World on Technorati.
Share markets around the world tumbled with the news of Koreas’ exchange of fire, and Spain deciding to shrink its debt sale due to rise in debt cost. Dow Jones tumbled by 1.33% to 11,029 points as at 6:00 pm GMT and FTSE, HANGSENG and Shanghai indices were down by 1.43, 2.67 and 1.94 percentages respectively. India’s SENSEX index was down by 1.33% and the broader Nifty index was down by 1.25%.
Q3 Growth Revised Up
Meanwhile, the US revised up its third quarter growth from annual rate of 2 percent to 2.5 percent, as exports as well as consumer and government spending were stronger than expected as per the commerce department. This positive news was offset by the news of rising tension in Korean peninsula and increased debt costs of Portugal and Spain. Existing home sales in the US fell more than forecast in October as per MSNBC news.
Q4 growth rate expected on the same line, but well below the 3.5% mark to bring down the high unemployment rate of 9.6 percent as per Reuters report.
North and South Koreas exchanged artillery shells after South Korea test fired a few shots as part of usual military drill on November 23. North Korea fired dozens of shells on a South Korean island, Yeonpyeong, one of the disputed islands along the western maritime border. The western maritime border is one of the contentious issues between the two Koreas. North Korea declines to recognise the border line saying that it was unilaterally imposed by the UN at the end of 1950-53 Korea war. The two Koreas are technically still at war, as the war ended with a truce but not with a ceasefire agreement.
North Korea says it warned South Korea to stop the military drills. But South Korea continued its drill. As soon as South Korea test fired some of its arsenal, North Korea began firing dozens of artillery shells. The firing reportedly continued for three hours. South Korea said two of its soldiers were killed, 17 were wounded and three civilians are hurt. The island is a military base for South Korea. Around 1200 families are also living on the island. The homes and mountains were on fire, NBC reported.
The US condemned the attack saying it would defend its ally. China said both sides should observe restrain and added it was time for resumption of six-partite talks. The two Koreas, China, Japan, the US and Russia constitute six-partite talks. Russia also asked for restrain. South Korea said North Korea’s attack was intentional. North Korea said South Korea fired first adding it would resort to merciless attacks if the disputed sea border was violated.