Police stand guard outside the main entrance of the National Assembly in Seoul on December 3, 2024, after South Korean President Yoon Suk Yeol declared a martial law emergency. South Korean President Yoon declared a martial law emergency on December 3, saying the move was necessary to protect the country from “communist forces” amid parliamentary wrangling over a budget bill.
Jung Yeon-je | Episode | Getty Images
South Korean stocks swung wildly in the US on Tuesday amid a day of political unrest in Korea after President Yoon Suk Yeol was forced to lift an earlier emergency martial law decree, raising fears of instability in the 13th largest world economy emerged.
The iShares MSCI South Korea ETF (EWY), which tracks more than 90 large and mid-sized companies in South Korea, fell as much as 7% to hit a 52-week low. Later in the day, the ETF pared losses to close 1.6% lower on Tuesday after Yoon said he would withdraw the emergency declaration following the National Assembly’s vote to overturn his martial law decree.
The ETF remains on track for its fifth consecutive negative day of unusually high trading volume. So far, more than 35 million shares have changed hands on Tuesday, more than ten times the 30-day average volume.
US-traded shares of Korean companies bottomed during the session. Korea Electric Power’s American depositary receipts (ADRs) fell more than 2%, and Korean e-commerce giant Coupang fell 3.7%. KT Corp., formerly Korea Telecom, saw shares fall less than 1%. Posco, a South Korean steel manufacturer, fell by more than 4%.
Within three hours of Yoon declaring martial law late Tuesday night, 190 of the National Assembly’s 300 lawmakers gathered to overturn the emergency order.
The staff of South Korea’s main opposition Democratic Party set up a barricade to block soldiers from entering the National Assembly on December 3, 2024, after South Korean President Yoon Suk Yeol declared martial law in Seoul, South -Korea.
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 times of emergency – would affect the country’s governance and democracy.
“The administration is in contact with the ROK government and is closely monitoring the situation,” the White House National Security Council said in a statement to NBC News.
According to the declaration of martial law, 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 declaration of martial law.
The Korea Exchange announced early Wednesday morning that the stock market would start trading normally at 9:00 AM KST.
The US dollar was last up about 0.9% against the South Korean won on Tuesday.