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Kospi slips 1.5% after Yoon's martial law declaration

Published: 04 Dec. 2024, 16:33 Updated: 04 Dec. 2024, 16:35

CHO YONG-JUN
[email protected]

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,464.00 points on Wednesday, down 1.44 percent, or 36.10 points, from the previous trading session. [YONHAP]

Shares sank by almost 1.5 percent Wednesday amid political chaos as opposition parties moved to impeach President Yoon Suk Yeol over his declaration of martial law overnight before reversing the decision hours later. The Korean won fell sharply against the dollar.

The benchmark Kospi fell 36.1 points, or 1.44 percent, to close at 2,464.00. The Kosdaq fell 13.65 points, or 1.98 percent, to 677.15.

Trade volume was heavy at 661.09 million shares worth 13.07 trillion won ($9.26 billion), with losers outpacing winners 733 to 175.

Foreigners sold a net 409 billion won worth of stocks, offsetting institutions and individuals' stock purchases valued at 357.52 billion won.

Late Tuesday, Yoon declared martial law, accusing the main opposition Democratic Party of being "antistate forces" paralyzing the functions of the state with impeachment motions and a downsized budget bill.

But Yoon abandoned the order, the country's first such motion in over four decades, early Wednesday after the National Assembly voted to overturn the declaration.

"The shock announcement overnight appears to have had a limited impact on the local stock market as the martial law attempt was lifted before the market opened," NH Investment & Securities analyst Kim Byung-yeon said.

The Ministry of Economy and Finance said it would deploy "unlimited liquidity" in the financial markets, if necessary, to avoid any volatility, which helped relieve investor sentiment in the stock market, he said.

There seems to be no upside momentum in the stock market for the time being as opposition parties submitted a parliamentary motion to impeach President Yoon earlier in the day, brokerages said.

Most large-cap stocks declined.

Samsung Electronics fell 0.93 percent to 53,100 won, LG Electronics shed 1.91 percent to 87,300 won, and Hyundai Motor was down 2.56 percent to 209,000 won.

LG Energy Solution declined 2.02 percent to 389,000 won and Samsung SDI also dropped 0.77 percent to 259,000 won.

SK hynix rose 1.88 percent to 168,000 won, KT&G climbed 0.41 percent to 123,400 won and Korea Zinc was up 8.37 percent.

The local currency was trading at 1,410.1 won against the greenback at 3:30 p.m., up 7.2 won from the previous session.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds rose 3.8 basis points to 2.625 percent, and the return on the benchmark 10-year U.S. government bonds rose 3.8 basis points to 4.224 percent.

BY CHO YONG-JUN,YONHAP [[email protected]]