Health rumors surrounding North Korean leader Kim Jong-un may expand volatility in South Korea’s stock market already gripped with fears on plunging oil prices, analysts said Wednesday.

Cheong Wa Dae’s announcement Tuesday that played down news reports of Kim being in critical condition will reduce uncertainties, but it is premature to determine that stock indexes and the local currency will be on a recovery track anytime soon, they added.

“If Kim Jong-un does not make a public appearance by May, investors will raise doubts about the North Korea regime’s stability. It will contribute to wide market volatility,” said Kim Young-hwan, an analyst at KB Securities.

Stressing that there have been a number of prior cases raising speculation on Kim’s health, market concerns evaporated as he made public appearances, he said.

“Even if the rumor is true, the possibility of North Korean regime collapse is low. However, expectations toward North Korea’s denuclearization will likely be lowered for a while,” he added.

Despite lingering uncertainties, the main bourse Kospi rose 16.77 points, or 0.89 percent, to close at 1,896.15. The tech-heavy Kosdaq closed at 635.16, up 6.39 points, or 1.02 percent from the previous session’s close.

The Kospi index had dropped 1.8 percent in the previous two trading sessions, but as retail investors continued scooping up local shares such as market bellwether Samsung Electronics and defense-related stocks, it began moving upward from the late afternoon Wednesday.

Retail investors purchased a net 317.2 billion won ($257.1 million) of stocks in the Kospi market, while foregin and institutional investors sold 37.8 billion won and 307.4 billion won, respectively.

During the previous trading session, local individual investors scooped up a net 708 billion won from the Kospi market and 80.5 billion won from the Kosdaq. In the meantime, offshore investors dumped 529.5 billion won from the Kospi and 61.6 billion won from the Kosdaq.

By Jie Ye-eun (yeeun@heraldcorp.com)