South Korea’s Stock Market Plunges Amid Political Turmoil
Martial Law Declaration Sparks Market Volatility
South Korea’s stock market took a hit on Wednesday as the nation’s president, Yoon Suk Yeol, declared martial law, only to rescind it hours later. This dramatic turn of events has sparked the biggest political crisis in decades in Asia’s fourth-largest economy.
KOSPI Index Falls Sharply
The KOSPI (^KS11) index closed down 36.10 points, or 1.44%, at 2,464.00, marking a 7.20% decline so far this year. The index has lost 2.7% in the previous 30 trading sessions, signaling a bearish trend.
Currency and Bond Markets Feel the Heat
The won (KRW=X) partially recovered after a sharp drop earlier, while the benchmark bond yield rose. The South Korean currency has lost 8.7% against the U.S. dollar so far this year, adding to the market’s woes.
Tech Giants Take a Hit
Among index heavyweights, chipmaker Samsung Electronics (005930.KS, SSNLF) fell 0.93%, while peer SK Hynix (000660.KS, HXSCL) gained 1.88%. Battery maker LG Energy Solution (373220.KS) slid 2.02%, reflecting the market’s uncertainty.
Government Intervenes to Stabilize Markets
In response to the crisis, the finance ministry announced its readiness to deploy “unlimited” liquidity into financial markets to prevent further turmoil. This move aims to calm investors’ nerves and stabilize the market.
Automakers and Tech Firms See Mixed Results
Hyundai (HYMTF, 005380.KS) slipped 2.56%, while sister automaker Kia (000270.KS) gained 0.10%. Search engine Naver (035420.KS, NHNCF) lost 3.11%, while instant messenger Kakao (035720.KS) jumped 8.50%.
Market Sentiment Remains Bearish
Of the total 938 traded issues, 176 advanced and 737 declined, indicating a bearish market sentiment. Foreigners net sold shares worth 408.8 billion won ($290 million) on the main board, further exacerbating the market’s decline.
Bond Market Sees Shift
In money and debt markets, December futures on three-year treasury bonds fell 0.08 point to 106.79. The most liquid three-year Korean treasury bond yield rose 3.2 basis points to 2.621%, while the benchmark 10-year yield added 5.3 basis points to 2.759%.
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