South Korean stocks are slipping in US trading after President Yoon Suk Yeol accused the opposition of anti-state activities and announced an emergency martial law on Tuesday.
In an unannounced televised address, the president blasted his political opponents for sympathizing with North Korea.
I declare martial law to eradicate the despicable pro-North Korean anti-state forces, and to protect the free constitutional order.
All political activities will be banned and media will be controlled under the emergency martial law.
South Korea ETF tanks on martial law news
The iShares MSCI South Korea ETF lost more than 7.0% to hit a 52-week low following President Yeol’s announcement on Tuesday.
This exchange-traded fund offers exposure to over 90 mid and large sized companies in South Korea.
The Franklin FTSE South Korea or FLKR is also down 6.0% at writing.
The Korea Exchange is now scheduled for an emergency meeting later today “to prepare response measures” and decide whether the country’s market will remain business as usual on Wednesday.
Among notable names that are tumbling this morning include Coupang – the US listed shares of which were down close to 10% at one point.
Coupang stock had formed a risky pattern in early November.
South Korean won tanks to a two-year low
The South Korean won also tanked versus the US dollar after President Yeol’s declaration of an emergency martial law.
USD gained more than 2.5% against the country’s currency that sunk to a two-year low following the announcement on Tuesday.
President Yeol has sought to strengthen ties with Japan and the United States and taken a firm and uncompromising stance against North Korea ever since he assumed office in the first half of 2022.
His conservative People Power Party has been in a deadlock with the liberal Democratic Party over the 2025 budget bill for at least a week.
National Assembly votes to overturn the martial law
South Korean lawmakers have already voted to overturn the emergency martial law that President Yoon Suk Yeol declared on Tuesday.
“When the National Assembly requests the lifting of martial law with the concurrent vote of a majority of the total members of the National Assembly, the President shall comply,” as per the constitution of South Korea.
Still, whether the president will oblige and the response of the country’s army is yet to unravel.
Plus, the clause 89 also states that the cabinet should review such an annulment as well.
Nonetheless, financial markets have already started responding to the vote. South Korean stocks as well as the won are paring loses as the National Assembly moved to rescind the president’s order and pledged “unlimited liquidity” to stabilise the market.
South Korean won is now down just over 1.0% while the South Korea ETF is 2.0% in the red at writing.
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