Another rout on the Chinese stock market sent Korean shares and currency tumbling Thursday, even as they were reeling from the repercussions of a purported hydrogen bomb test by North Korea the previous day.

The country’s main stock index KOSPI slipped 1.1 percent to close at 1,904.33 points, as a second market crash in China in a week rattled already shaky investor sentiment.

The won-dollar exchange rate crashed through the psychologically important 1,200 won-per-dollar mark. Extending its losses for a sixth day, the local currency closed at 1,200.6 won against the greenback, the lowest since Sept. 8 when it was quoted at 1,200.9. It shed 2.3 won from a day earlier. 

Trading on Chinese bourses was halted Thursday after a market index, the CSI 300, nose-dived 7 percent, triggering an automatic circuit breaker.

The volatility followed a move by China to devalue its tightly controlled currency, the yuan, which spooked global investors who deemed it a signal of the Chinese government’s growing worry about its economy. A surprise devaluation of yuan in August last year had triggered a global market rout, wiping off more than $5 trillion in global stocks.

Seoul authorities were on high alert as financial markets took one hammer blow after another, while the fragile domestic economy failed to provide much support.

In a meeting of representatives from the government, financial industry and private economists, Yim Jong-yong, chairman of the Financial Services Commission, said the country needed to act decidedly on domestic risk factors, while staying vigilant for external risks.

“More than any time before, we now face a complex set of global uncertainties. We must stay vigilant in order to swiftly respond to any situation as it arises,” he said.

From the first trading day of 2016, Korea’s financial markets trembled on mega events -- a China market meltdown; a flare-up in geopolitical tensions in the Middle East; a North Korean bomb test and then another China debacle.

“As if to meet predictions that 2016 is going to be a rough ride for the economy, the world and local financial markets have been very volatile in the first days of this year,” said Kim Yong-beom, the FSC general director in a separate meeting in Seoul.

“Investors are cautious, as (negative) events have followed close on the heels of one another,” he added. 

By Lee Sun-young (milaya@heraldcorp.com)