Police stand guard in front of the main gate of the National Assembly in Seoul on December 3, 2024, after South Korea’s President Yoon Suk Yeol declared emergency martial law. South Korea President Yoon on December 3 declared emergency martial law, saying the step was necessary to protect the country from “communist forces” amid parliamentary wrangling over a budget bill.
Jung Yeon-je | Afp | Getty Images
South Korean stocks swung wildly in the U.S. on Tuesday amid a day of political upheaval in Korea after President Yoon Suk Yeol was forced to lift an earlier emergency martial law decree, raising fears of instability in 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 to about 1.8% after Yoon said he would lift the emergency declaration following the National Assembly’s vote to overturn his martial law decree.
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The ETF is still on pace for its fifth straight negative day with unusually heavy trading volume. Over 35 million shares have changed hands so far Tuesday, more than 10 times its 30-day average volume.
U.S.-traded shares of Korean companies were off their session lows. Korea Electric Power’s American depositary receipts (ADRs) dropped more than 2%, and Korean e-commerce giant Coupang shed 3%. KT Corp., formerly Korea Telecom, saw shares fall less than 1%. Posco, a South Korean steel manufacturer, declined 4%.
Within three hours of Yoon declaring martial law late Tuesday night, 190 out of the 300 National Assembly lawmakers gathered to overturn the emergency order.
South Korea’s main opposition Democratic Party’s staff set up a barricade to block soldiers at the National Assembly after South Korean President Yoon Suk Yeol declared martial law in Seoul, South Korea, December 3, 2024.
Yonhap | Via Reuters
The president accused opposition parties of sympathizing with North Korea and controlling parliament. Yoon did not specify how martial law — a temporary rule by military authorities in a time of emergency — would affect governance and democracy in the country.
“The Administration is in contact with the ROK government and is monitoring the situation closely,” said the White House National Security Council in a statement to NBC News.
Under the martial law declaration, all political activities and acts that “incite social disorder” are prohibited. This is the first time since 1980 that a South Korean leader has issued a martial law declaration.
The Korea Exchange announced it would hold an emergency meeting “to prepare response measures” and later decide whether the market would open on Wednesday, according to local media reports.
The U.S. dollar was last higher by about 0.9% against the South Korean won Tuesday.
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