NORTH Korea announced the death of supreme leader Kim Jong Il this morning while the world watched for signs of instability in a nation pursuing nuclear weapons.
South Korea launched a high alert for its military as it faces the North's 1.2 million-strong armed forces, while President Barack Obama and South Korean President Lee Myung-bak agreed by phone to closely monitor the events and cooperate.
People on the streets of North Korea's capital, Pyongyang, broke down in tears as they learned that their "Dear Leader" had died at the age 69 of heart failure on Saturday.
While there was no official statement on succession, there were clear indications that Kim's 20-something son, Kim Jong Un, would be in charge.
Asian stock markets moved lower amid the news, which raises the possibility of increased instability.
South Korea's Kospi index was down 3.9pc at 1,767.89 and Japan's Nikkei 225 index fell 0.8pc. Hong Kong's Hang Seng slipped 2pc to 17,929.66 and the Shanghai Composite Index also dropped 2pc.
Chae Jae-eun, a South Korean company worker, said from Seoul that she worried mostly about the economic implications of Kim Jong Il's death.
She also said North Korea now stands at a crossroads as the country may isolate itself further or open up.
The death may also put a brake on talks aimed at getting North Korea to give up its nuclear weapons, which the international community had been hoping would continue with the US.
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