The planned long-range rocket launch by the Democratic People's Republic of Korea (DPRK) had little impact on the South Korean financial market as the launch was pre- announced, government officials and market watchers said Wednesday.

The DPRK's official news agency KCNA reported that the DPRK successfully launched the long-range rocket, saying that the second version of Kwangmyongsong-3 satellite was launched by the Unha-3 carrier rocket from the Sohae Space Center in Cholsan County, North Phyongan Province, and entered pre-set orbit.

Seoul officials were quoted as saying that Pyongyang fired off the three-stage rocket at 9:49 a.m.. The first stage of the rocket was reported to fall in the Yellow Sea, before its second stage landed in waters near the Philippines.

The move came two days after the DPRK announced its plan to extend the 13-day launch window by one week until December 29, boosting speculation that the launch would be delayed due to technical problems.

"This will have only a short-lived effect on the markets given that it comes as little surprise. Historically, geo-political events sparked by Pyongyang have had fairly limited, short-lived effects on the markets," said Kwon Young-sun, an economist at Nomura International in Hong Kong.

Kwon expected the South Korean government to do whatever it takes to limit any financial market volatility that may occur on the back of the launch.

Finance Minister Bahk Jae-wan stressed the preemptive and swift response to the launch. The authorities "will take necessary actions preemptively and swiftly, while bracing for the possible risk factors in the global financial markets and uncertainties in the economic sector," Bahk said at the crisis management meeting.

Bahk said at another meeting that the rocket launch had only limited impact on the local financial market, saying that local stocks and dollar/won exchange rates moved in a stable manner. He also pointed out the assessment of global credit rating agencies that the launch will have no material impact on the country's sovereign rating.

Standard & Poor's said in a statement that "it does not expect Wednesday's rocket launch by the DPRK to exert a material negative impact on the sovereign ratings on the Republic of Korea."

The rating agency noted that developments following the launch will not raise geopolitical risks in the Korean peninsula on a prolonged basis, saying that the negative economic impact on South Korea will be modest and temporary.

Seoul shares stayed in positive terrain throughout the session as the DPRK's rocket launch was already priced in. The benchmark Korea Composite Stock Price Index (KOSPI) advanced 10.82 points, or 0.55 percent, to close at 1,975.44. Trading volume stood at 453. 14 million shares worth 4.56 trillion won ($4.24 billion).

"The stock market was little affected by the rocket launch as the news was already priced in. The launch seemed to have no impact on the market," Kang Hyun-gie, a strategist at Solomon Investment & Securities in Seoul, told Xinhua.

Kang noted that the extent of international sanctions on the DPRK's rocket launch will decide on how the financial market will move forward, saying that there has been no impact from the news until now.

The local currency appreciated against the US dollar to settle at 1,075.0 won, up 1.7 won from Tuesday's close. Bond prices ended higher, with the yield on the benchmark five-year government bonds falling 0.01 percentage point to 2.96 percent.

South Korea's sovereign debt risks were little changed despite the DPRK's rocket launch. The country' five-year credit default swap (CDS) premium, or the cost of hedging against losses on sovereign debt, moved between 62 and 63 basis points (bps), almost the same as the closing price of 63 bps in New York overnight.

"In the past, the DPRK's rocket launch was viewed as resolution of uncertainties in the market that drove up the stock prices. Such experience and the pre-announcement made its influence limited and temporary," Financial Services Commission (FSC) vice chairman Choo Kyung-ho said at an emergency meeting for reviewing financial situation.

In April when the DPRK fired off the first version of the rocket, the KOSPI advanced 1.12 percent, with the local currency appreciating 0.56 percent versus the dollar. In April 2009, the index gained over 1 percent despite the DPRK's rocket launch, with the South Korean won surging 2.31 percent against the greenback.