South Korea’s KOSPI fell 0.3%, after closing down 1.3% the day before when President Yeon Suk-yul tried to impose martial law.
President Yoon declared martial law on Tuesday in an attempt to confront “anti-state forces” among his political opponents, but rescinded the measure within hours after facing immediate backlash, including parliamentary rebuttal and public protests. This has led to lawmakers in the country calling for Yoon’s impeachment.
South Korea’s Finance Ministry on Thursday announced the creation of a 40 trillion won ($28.35 billion) market stabilization fund after Yoon’s announcement sent markets into turmoil. The Bank of Korea may buy bonds and expand repurchase operations, with authorities ready to act under contingency plans if necessary.
Other data showed that South Korea’s economy grew by only 0.1% in the third quarter, unchanged from preliminary estimates issued earlier.
This comes at a time when the country is already facing a sharp decline in the value of its assets, including its stocks and currencies. The Kospi index has fallen by about 7% this year, while the won has fallen by about 9% against the US dollar.
South Korea recently celebrated its inclusion in the index FTSE Russell’s World Government Bond Index.
Concerns about the fallout from political turmoil in South Korea kept sentiment towards broader Asian markets cautious.
