Oct. 9 (Bloomberg) -- North Korea's announcement that it tested a nuclear weapon is a ``sign of desperation'' and declines in Asian stocks following the statement will be short-lived, according to Templeton Asset Management Ltd.'s Mark Mobius.

``This is actually not a big deal and I don't expect long- term effects for the markets,'' said Mobius, who oversees about $30 billion in emerging-market equities, in an interview. ``This is something I have been expecting for quite some time now.''

The Morgan Stanley Capital International Asia Pacific excluding Japan Index lost 0.9 percent to 343.14 at 5:41 p.m. in Hong Kong. South Korea's Kospi slumped 2.4 percent, the most since June 13. South Korean equities are ``cheap,'' Mobius added.

North Korea has ``safely and successfully conducted an underground nuclear test,'' the official Korean Central News Agency said today. The trial, the first announced by the government, gives the nation ``a powerful, self-reliant defense capability.''

North Korea has faced increasing condemnation over its nuclear ambitions since its July 5 test of seven missiles, including the Taepodong-2, which U.S. officials have said may be able to reach Alaska. North Korea said on Oct. 3 it would conduct a nuclear test, without giving any indication of timing.

China's government called the test a ``brazen'' disregard of international opinion. The U.S. condemned the test and called for immediate action from the United Nations Security Council.

To contact the reporter on this story: Darren Boey in Hong Kong at dboey@bloomberg.net; Eric Burg in London at eburg@bloomberg.net

Last Updated: October 9, 2006 06:10 EDT