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 opened lower Wednesday, after a day of political upheaval in South Korea that saw President Yoon Suk Yeol impose and then lift a martial law decree within hours.
The country’s Kospi index was down 1.7% while the Kosdaq fell 1.9%, paring some losses after a report on a possible deployment of funds by the country to shore up its markets.
According to Yonhap News Agency, the country’s 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.
Amid fears of financial instability, the Bank of Korea monetary policy board convened an extraordinary board meeting at around 9 a.m local time.
As per local reports, the country’s opposition Democratic Party has said it would begin impeachment proceedings to remove Yoon if he doesn’t step down immediately. Yoon’s chief of staff and senior secretaries have reportedly offered to resign en masse.
Other Asia-Pacific markets opened mixed as investors digested events in South Korea.
Japan’s Nikkei 225 was trading 0.1% lower, and the Topix down 0.2%.
Hong Kong Hang Seng index futures were at 19,785, higher than the HSI’s last close of 19,746.32.
Investors also assessed Australia’s real GDP growth which came expanded 0.8% in the third quarter, year-over-year, according to data from the Australian Bureau of Statistics.
The figure missed growth expectations of 1.1% by economists polled by Reuters and represents the eighth quarter without a rise in GDP.
Australia’s S&P/ASX 200 was trading 0.45% lower.
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.
Meanwhile, 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.