South Korea moves to stabilize markets after lifting of martial law

By Yasin Gungor

ISTANBUL (AA) - South Korean financial markets experienced significant volatility after President Yoon Suk Yeol declared martial law, with parliament's decision to lift it slowly restoring stability.

The unprecedented move immediately impacted market dynamics. The iShares MSCI South Korea ETF plummeted around 7% in US trading, while Coupang and POSCO Holdings saw their share values drop 10% and 8%, respectively.

Early on Wednesday, parliament voted to overturn the martial law decree. A Cabinet meeting presided over by Prime Minister Han Duck-soo passed a resolution lifting martial law, effectively nullifying Yoon's action.

The South Korean won, which had lost around 3% against the US dollar, began recovering in value following the parliamentary intervention. Shares of Samsung Electronics, which tumbled 7.5% initially, closed with a 3.7% loss.

In addition, South Korea's financial oversight body announced Wednesday its preparedness to allocate 10 trillion won ($7.07 billion) to a stock market stabilization fund at any moment, according to Yonhap news agency.

Stock markets will open as usual Wednesday, the Finance Ministry said. Finance Minister Choi Sang-mok sought to reassure investors, committing that the government would implement all necessary actions to stabilize the financial and foreign exchange markets, which may include offering unlimited liquidity if required.

Online services, initially disrupted by the announcement, gradually normalized. Naver and Daum, major web portals, reported stabilizing traffic and service levels.

This was the first martial law attempt in 45 years, with 190 lawmakers in the 300-seat parliament voting against Yoon's move.

While immediate market responses showed signs of stabilization, long-term implications for South Korea's economy and governance remain uncertain.