People gather outside the National Assembly, after South Korean President Yoon Suk Yeol declared martial law, in Seoul, South Korea, December 4, 2024.
Soo-hyeon Kim | Reuters
South Korean markets fell Wednesday as pressure mounted on President Yoon Suk Yeol to step down after he imposed and then lifted a martial law decree within hours.
The country’s Kospi index dropped 1.44% to end at 2,464, and the Kosdaq fell 1.98% to 677.15, recovering some losses after dropping over 2% earlier in the day.
A coalition of lawmakers from South Korea’s opposition parties put forward a bill to impeach Yoon on Wednesday afternoon, according to the spokesperson’s office of the main opposition Democracy Party.
Yoon’s office said Wednesday that his chief of staff and senior secretaries have offered their resignations.
Amid fears of financial instability, the Bank of Korea said it would boost short-term liquidity and deploy measures to stabilize the FX market as required following an emergency board meeting. It will also make available any special loans needed to inject funds into the market, it added.
Earlier, Yonhap News Agency had reported that country’s top financial regulator was ready to deploy 10 trillion won ($7.07 billion) in a stock market stabilization fund at any time to calm market sentiment.
Meanwhile, South Korea’s foreign exchange authorities are suspected of selling U.S. dollars on the onshore market early Wednesday in efforts to limit declines in the Korean won, two dealers told Reuters.
South Korea 10-year government bond yields snapped 13 days of declines and were last trading at 2.720.
Other Asia-Pacific markets were trading lower as investors digested events in South Korea.
Japan’s Nikkei 225 ended nearly flat at 39,276.39, while the Topix dropped 0.47% to 2,740.6.
Hong Kong’s Hang Seng index was trading 0.1% higher. Mainland China’s CSI 300 dropped 0.2%.
Investors also assessed GDP data out of Australia, which showed economic growth come in slower than expected in the third quarter, as elevated borrowing costs and sticky inflation continued to weigh on the country.
Australia’s S&P/ASX 200 fell 0.38% to end the trading day at 8,462.6.
In the U.S. overnight, South Korean stocks swung wildly amid the political upheaval that rocked the world’s 13th-largest economy.
The iShares MSCI South Korea ETF (EWY), which tracks more than 90 large and mid-sized companies in South Korea, tumbled as much as 7% to hit a 52-week low.
Later in the day, the ETF cut losses and closed Tuesday down 1.6% after Yoon said he would lift the emergency declaration following the National Assembly’s vote to overturn his martial law decree.
The S&P 500 inched up by 0.05%, while the Nasdaq Composite added 0.4%. Both indexes closed at records. The 30-stock Dow was the laggard, with a decline of nearly 0.2%.
— CNBC’s Yun Li and Hakyung Kim contributed to this report.
