North Korea Rhetoric and Reality
The South Korean stock market looks like it is about to explode to the upside. It made a new closing high in April. The intraday high from 2011 is 2231.47. A 1 percent gain will take out that high. EWY is also near its all-time high, showing that the advance in the KOSPI is not due to currency devaluation.
If any market should be nervous about a war on the Korean Peninsula, it would be the South Korean stock market. Seoul is within range of North Korean artillery. As the economic, cultural and population center of South Korea, it is a prime target for a North Korean attack. Even if South Korea wins a total victory in a war, Seoul could still suffer substantial damage. The South Koreans do not appear worried though.