South Korea Declares Martial Law Amid Market Turmoil

On December 3, 2024, South Korean President Yoon Suk Yeol declared emergency martial law, citing a need to protect the country from 'communist forces' and accusing opposition parties of parliamentary manipulation. This announcement, made in an unannounced late-night address, significantly impacted the financial markets, causing South Korean stocks and currency to tumble. The iShares MSCI South Korea ETF and other related stocks experienced substantial declines, while the South Korean won plummeted to its lowest level against the US dollar in over two years. The martial law declaration has heightened investor concerns about political instability and economic repercussions, as the Korean won was already under pressure from potential US trade tariffs on China. The Korea Exchange is considering response measures, including whether to open the market on Wednesday.