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 1.6% 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.
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.
Bank of Korea holds emergency meeting after Yoon lifts martial law
The Bank of Korea is holding an emergency meeting after South Korean President Yoon Suk Yeol lifted a surprise martial law declaration overnight.
The central bank was set to convene an extraordinary board meeting at around 9 a.m. local time on Wednesday. Last week, the BOK cut its benchmark interest rate by 25 basis points in a surprise move.
Around that time, local news agency Yonhap reported that South Korea’s regulator financial regulator said it is prepared to allocate 10 trillion won ($7.07 billion) to a stock market stabilization fund any time.
Read the full story here.
—Lee Ying Shan
CNBC Pro: ‘We really like the U.S.’ Julius Baer portfolio manager says. Here’s where she sees opportunity
At a time when investors are mixed on the U.S. market, one portfolio manager remains optimistic and sees reason to stay invested over the longer-term.
“We really like the U.S. Now that the election result is clear and behind us, we can reasonably assume a higher growth rate in the U.S., and that’s probably going to lead to an end of year rally,” Aneka Beneby, portfolio manager at Julius Baer International said, revealing segments she sees opportunities in.
CNBC Pro subscribers can read more here.
— Amala Balakrishner
CNBC Pro: How are investors trading France’s political chaos?
The French government is on the brink of collapse this week and investors are gearing up for a volatile week of trading, with some eyeing opportunities amid the chaos.
Investors have shared how they’re trading French bonds and laid out what could happen if the government falls, and other scenarios.
CNBC Pro subscribers can read more here.
— Ganesh Rao
S&P 500, Nasdaq close at fresh record highs
The S&P 500 and Nasdaq Composite closed at new records on Tuesday.
The broad market index advanced 0.05% to close at 6,049.88, and the tech-heavy Nasdaq gained 0.4% to close at 19,480.91. Meanwhile, the blue-chip Dow Jones Industrial Average slid 76.47 points, or 0.17%, to finish at 44,705.53.
— Sean Conlon
EWY shares fall as South Korean president declares martial law
Police struggle with people trying to enter the National Assembly in front of the main gate of the National Assembly in Seoul, South Korea on December 3, 2024, after South Korea’s President Yoon Suk Yeol declared emergency martial law.
Jung Yeon-je | Afp | Getty Images
The iShares MSCI South Korea ETF (EWY) slipped more than 4% on Tuesday, after President Yoon Suk Yeol accused the country’s opposition party of controlling parliament and supporting North Korea.
The iShares MSCI South Korea ETF.
Korean won tumbles against greenback
The Korean won weakened 1.2% against the dollar to its lowest level in two years on the news that South Korean President Yoon Suk Yeol declared “emergency martial law” on Tuesday.
The dollar last traded at 1,421.29 won.
USD/KRW on Tuesday
— Hakyung Kim
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