Korea Won, Stocks Rise as Impeachment Vote Lifts Sentiment
(Bloomberg) -- South Korea’s currency and its stock market rose at the open on Monday, as investors responded to a weekend vote to impeach President Yoon Suk Yeol following his attempt to impose martial law.
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The benchmark Kospi Index jumped as much as 0.9% in early trading, putting it on track to erase all of its losses since President Yoon stunned investors on Dec. 3 by imposing — and quickly reversing — martial law.
The Korean won, which was closely watched by traders after its heavy losses during the recent political chaos, strengthened as much as 0.5% to 1,428.20 per dollar.
“The impeachment bill’s passage will imply that the worst is over for the won in terms of political uncertainty, and markets will finally be able to gauge the direction of the currency,” So Jaeyong, an economist at Shinhan Bank Co., said before the vote took place. “It will help put a cap on the won’s losses at around 1,444 per dollar,” he added.
The nation’s three-year bond futures were down six ticks to 106.72, while its 10-year bond futures declined 46 ticks to 118.78.
The broad lift in Korean markets on Monday showed the relief among investors as the country’s recent political drama neared its close. But investors and analysts warn that the long-term worries that have plagued Korean assets this year — including fears about Donald Trump‘s tariff threats — are still likely to weigh on sentiment.
“The issues that have weighed on the local stock market, such as Trump’s second presidency and a slowdown in the chip sector, have not been resolved so the uncertainties still linger,” said Park Jinho, head of equity investment at NH-Amundi Asset Management Co.
The impeachment vote requires approval from Korea’s Constitutional Court, which has 180 days to make its decision and could reinstate Yoon if it decides the impeachment isn’t valid. Court approval would trigger a presidential election within 60 days.
Read: How Impeachment of South Korea’s President Works: QuickTake
South Korea’s central bank vowed on Sunday to stabilize financial markets, adding that it expected markets to become less volatile in the wake of the vote. On Monday, financial authorities repeated their pledge to continue monitoring the market for 24 hours while the stock exchange said it will establish a committee to manage potential volatility.