The state financial regulator has launched an inquiry into rumors about the possible effects of radioactive leakage from Japan on Korean soil, which apparently contributed to Tuesday’s plunge in Korean shares, officials said Wednesday.

In tandem with the police and Korea Exchange Inc., the Financial Supervisory Service is investigating allegations that some people were trying to manipulate stock prices by spreading rumors that radioactive material from an earthquake-crippled nuclear power plant in Fukushima, Japan, are to land in Korea soon.

The rumors were circulating Tuesday via text messages and social networking media, heightening public fears that radioactive leakage, which could lead to cancer, could soon reach South Korean soil.

The benchmark KOSPI Index fell 2.4 percent Tuesday, the biggest decrease since November.

“We have requested that the Korea Exchange Inc. check if there were any irregular stock trades as there was suspicion that some speculators intentionally disseminate the rumors to gain profits,” an FSS official said, refusing to be named.

Police are now hunting those who first spread the rumors.

“We are tracking down the first one who repeatedly spread the groundless rumors that radioactive material from the nuclear power plant would arrive here in the afternoon,” an official at the Cyber Terror Response Center, the National Police Agency’s Internet crime unit, said Wednesday, refusing to be named.

“Those who relayed the message to others could also face criminal punishment although we are currently focusing on finding the one who first spread the rumors.”

Under the communications law, those who repeatedly spread rumors that can cause fear and anxiety to the general public can be jailed for up to one year or fined a maximum of 10 million won ($8,830).

The rumors spread as the Korea Institute of Nuclear Safety reassured the public Wednesday that no radiation abnormality has been detected in more than 70 locations across the country, and that there is little possibility of radioactive leakage in Japan affecting South Korea.

The KINS said that the radiation density level on Uleung Island located in the East Sea between South Korea and Japan was within the normal limits.

Meteorological experts say that the wind is blowing toward the Pacific Ocean away from Japan and other Asian countries, pointing out that such radiation leaks would rarely affect the Korean Peninsula.

Even if the wind changed direction and moved toward Korea, radioactive material would be diluted on its way across the East Sea, they said.

The police plans to reinforce its monitoring of social networking media to see if there are any more negative rumors related to the earthquake, tsunami and the world’s most serious nuclear accident since the Chernobyl disaster in Ukraine in 1986.

Rep. Ahn Sang-soo, leader of the ruling Grand National Party, urged the public not to be misled by false rumors about radioactive leakage.

“Groundless rumors are spreading in South Korea. It is a dangerous act that could cause a fatal impact on our society and economy. We need to check measures to stop such rumors and address public fears,” he said during a meeting of senior party officials.

By Song Sang-ho (sshluck@heraldcorp.com)