S.Korean stocks hammered over fears of Chinese retaliation for missile system (updated)

Amorepacific

03/03/2017 01:45

(Recasts with broader selling, adds company comment, 
background) 
    SEOUL, March 3 (Reuters) - South Korean stocks were pummeled 
in early trade on Friday after media reported China had ordered 
tour operators to stop selling trips to the country, amid rising 
tensions over the deployment of a U.S. missile defence system. 
    South Korean media reported that Beijing on Thursday ordered 
Chinese tour operators to boycott the country, potentially 
choking off one of its biggest sources of foreign visitors. 
    China has expressed anger over South Korea's moves to deploy 
the missile system, which Seoul and Washington say is designed 
to thwart the threat of attack from nuclear-armed North Korea, 
but which Beijing says is targeted at China. 
    Lotte Duty Free on Thursday said a cyber attack originating 
from China crashed its website. One of its affiliates on Monday 
approved a land swap to allow the missile system to be deployed 
outside Seoul, sparking threats of retaliation against Lotte 
Group in Chinese state-run media.  urn:newsml:reuters.com:*:nL3N1GF2BZ 
    The tensions sent shockwaves through the share market on 
Friday, with aviation, retail, tourism and cosmetics firms hit 
hard. 
    Jeju Air  089590.KS  fell 5.6 percent, retailer Hotel Shilla 
 008770.KS  tumbled as much as 13 percent, and tour operator 
Hanatour  039130.KS  and cosmetics firm Amorepacific  090430.KS  
were both down 7 percent. 
    An official at one small South Korean tour agency who works 
with Chinese outbound tour agencies said her Chinese 
counterparts had been told to limit Korean tours. The official 
said the agency had not seen cancellations yet but expected new 
bookings to fall. 
    A Hotel Shilla spokesman said there was currently no change 
detected in Chinese tourist visitor numbers as travel plans were 
made months in advance. 
    South Korean companies have reported increasing difficulties 
in China since Seoul and Washington in July agreed on the 
deployment of the U.S. Terminal High Altitude Area Defence 
(THAAD) system. South Korean artists have also said performances 
had been cancelled without clear explanation. 
 
 (Reporting by Hyunjoo Jin and Joyce Lee; Editing by Stephen 
Coates) 
 ((hyunjoo.jin@thomsonreuters.com; 82-2-3704-5685; Reuters 
Messaging: hyunjoo.jin.thomsonreuters.com@reuters.net)) 
 
Keywords: SOUTHKOREA CHINA/TOURISM