North Korean leader Kim Jong-Un's decision to suspend the nuclear tests is likely to improve the geopolitical situation in South Korea as the danger of any impending Korean war upon the latter's economy is said to be alleviated.
The on-going tensions in the Korean peninsula had been cited as the reason for the undervalued stocks in South Korea, Yonhap quotes market watchers.
Pyongyang's state media on Saturday said it will stop nuclear and missile tests and dismantle its nuclear test site in a shift of policy focus to the economy.
The conflict between North-South Korea had led to undervalued local stocks in South Korea. Though, the announcement regarding denuclearization of North Korea has raised new hopes among the investors as the inter-Korean tension is likely to be eased out.
Further denuclearisation would help in lowering the military tensions in South Korea and help to stabilise the economy and political environment in the country.
The announcement came ahead of the scheduled North-South Korea summit.
The North Korean summits with the United States and South Korea are expected to lay the process for denuclearisation and also ease out on the international sanctions levied on North Korea regarding its nuclear activities.
There had been continued efforts by Japan, South Korea, China, and United States towards denuclearisation of North Korea.
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