Hong Kong ( CNN ) -- Shares in Asia slumped on Monday on fears the death of North Korean leader Kim Jong Il could lead to instability on the divided Korean peninsular . South Korea 's Kospi Index fell 4.9 % to 1,750.60 in mid-morning trading in Seoul before climbing slightly to 1,766,82 to be 4 % off by midday . Key stocks tumbled , with Samsung Electronics , the largest stock on the Kospi , falling 3.5 % and LG Display , the world 's second largest panel maker , down 7.2 % in early trading . Already battered by fears that possible credit downgrades in European countries could derail a solution to the euro zone debt crisis , Asian markets fell across the board . Enigmatic North Korean leader Kim Jong Il dies at the age of 69 . At the open , Japan 's Nikkei 225 index was down 1.1 % at 8,304.47 , Hong Kong 's Hang Seng slid 2.5 % t to 17,833.42 and the Shanghai Composite Index fell 2.6 % to 2,167.68 . June Park , senior economist at Meritz Securities , told Reuters.com the death of Kim Jong Il had rattled investor confidence . `` This is definitely negative factor for markets with no detailed information on his death . It will drive the stock markets lower and the Korean won to depreciate sharply as geopolitical risks are rising and foreign investors could withdraw money out of South Korea , '' she said . With South Korea 's military on `` high alert '' and South Korea 's President Lee Myun Bak convening a national security council meeting , Markets in Taiwan , the prospect of further instability caused by succession problems in North Korea also weighed on markets across the region . Markets in Taiwan , Singapore , Australia , New Zealand and Indonesia also fell . Chung Young-Tae of the Korea Institute of National Unification was quoted by Reuters.com as saying that while the death was not unexpected , what happens next will be `` very important . '' While Kim 's son , Kim Jong Un , is widely believed to have been groomed as a successor , no official announcement has been made . `` Kim Jong-un is not yet the official heir , but the regime will move in the direction of Kim Jong-un taking center stage , '' he said . `` There is a big possibility that a power struggle may happen . `` It 's likely the military will support Kim Jong-un , '' he added .
Death of North Korean leader rattles markets across the globe . South Korea 's Kospi Index slides almost 5 % at the time . Countries from Australia to Japan also sink on the news . Concerns grow over the crisis in North Korea .