Jeju Air fell 5.6 percent.
SEOUL: 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.
The tensions sent shockwaves through the share market on Friday, with aviation, retail, tourism and cosmetics firms hit hard.
Jeju Air fell 5.6 percent, retailer Hotel Shilla tumbled as much as 13 percent, and tour operator Hanatour and cosmetics firm Amorepacific 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. - Reuters
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