On March 26, there was an accident on the West Sea of South Korea. A Korean navy vessel, patrol ship Cheonan sank in waters. The investigation is still going on, but there has been a lot of speculation in the market, and skepticism prevails in the market about what the market reaction will be or how the market respond to this. Reactions from abroad are quite same and limited under the situation that the cause of the sinking has yet been found, and markets are holding back their decisions. Still, there are three guesses in the market: internal explosion, hitting by floating mine, or hitting by torpedo. However, whatever the cause is, market is digesting this incident with the minimum impact on the Korean financial market. Overall, international markets seem to hold back their decision about the Korean financial market. In terms of future implication, both overseas and domestic financial markets are showing positive reactions even though the investigation on this incident is still underway. Please visit http://www.fsc.go.kr/eng/index.jsp for more details.