There’s something of the spirit of the blitz about South Korean equities. As relations across the demilitarised zone have grown more strained, investors appear to have become more sanguine. Rather than bolting at the first signs of trouble, investors are simply reshuffling portfolios within Korea. Morgan Stanley notes that sector rotation so far this year is more than twice the previous five years’ average. That has had a soothing effect on market volatility, a third lower than the five-year average. Meanwhile, the

long-established “Korea discount” – the price/book spread between the Kospi and the broader Asian benchmark, excluding Japan – has shrunk steadily, to less than half its five-year average.

Assurances of state support probably help. Seoul’s strategy and finance ministry said on Wednesday it would supply “ample” liquidity if needed to keep financial markets stable, while countering any “herd” behaviour. More fundamentally, though, the calm suggests that investors within Korea are tiring of playing the armchair general. They have grown up with the default view that conditions in North Korea are so wretched, and so at odds with every trend in the modern world, that the stand-off can’t last. But that was the thinking behind the 1994 US-North Korean Agreed Framework. Sixteen years on, the hermit kingdom is obviously still wedded to its Songun (“military first”) doctrine.