S. Korea’s financial markets struggle amid political instability

The financial and foreign exchange markets, shaken overnight by the declaration of "emergency martial law," remained on edge on Wednesday. While financial authorities have gone “all out” to provide unlimited liquidity in a bid to stabilize the markets and narrowly averted panic selling, foreign investors remain cautious about the local stock market.

The KOSPI closed at 2,464.00, down 1.44% from the previous day. The index opened 1.97% lower in the wake of the martial law declaration and plunged as much as 2.3% in the morning. Losses were later pared by bargain hunters, but foreign investors sold more than 400 billion won in KOSPI stocks alone. The KOSDAQ also fell, closing 1.98% lower at 677.15. Meanwhile, the won-dollar exchange rate, which had surged to 1,440 won overnight, settled at 1,410.1 won, up 7.2 won from the previous day.


이동훈 기자 dhlee@donga.com