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Hong Kong, China — South Korean stocks tumbled Monday as the country was racked with political uncertainty after President Yoon Suk Yeol escaped impeachment following his brief imposition of martial law last week.
The retreat came on a tough day for Asian markets despite another record on Wall Street, though Hong Kong bounced in the afternoon after China said it would adopt a looser approach to monetary policy.
Traders were also keeping tabs on Syria after president Bashar al-Assad’s removal.
Investors in Seoul were on edge after a near-total boycott of Saturday’s impeachment vote by Yoon’s People Power Party (PPP) doomed it to failure.
However, the main opposition party said Sunday it would try again, while police arrested the defence minister in charge of the martial law operation and the interior minister resigned.
They and Yoon are being investigated for alleged insurrection. The president was also hit Monday with a travel ban.
The crisis has fuelled concerns about Asia’s number four economy, which was already struggling and faces further pain as Donald Trump heads back to the White House threatening to resume his hardball trade policy.
Michael Wan at MUFG said the hit to the country’s markets “may include slower tourism inflows, weaker domestic demand, and a dent to corporate sentiment, especially if street protests become more vociferous and the budget passage remains in stalemate”.
“South Korea was already one of the more vulnerable forex markets in Asia to Trump 2.0’s policies, and the political uncertainty also comes at a juncture just when leadership is needed to navigate these significant global policy shifts.
