(Bloomberg) — South Korea’s currency and its stock market gave back early gains following a vote to impeach President Yoon Suk Yeol, as investors shifted focus away from politics and back to the broad economic worries that have plagued the market.
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The Korean won and the benchmark Kospi Index were fluctuating between gains and losses in mid-morning trading, reversing an opening rally that followed the weekend ouster of Yoon. The president had stunned investors on Dec. 3 by imposing — and quickly reversing — martial law, leading to a widespread selloff in Korean assets.
The short lifespan of the boost to markets was largely because traders had already priced in Yoon’s impeachment, said analysts in the country.
“Nothing has changed fundamentally,“ said Cho Junkee, an analyst at SK Securities Co. “The market has already reflected the impeachment last week and the impeachment vote is not providing further upside as investors take profit,“ he said.
The benchmark Kospi Index had jumped as much as 0.9% in early trading, putting it on track to erase all of its losses since the martial law move. The index is now trading around flat for the day, although the small cap Kosdaq Index is around 0.8% higher.
The South Korean won has also wiped out gains that were spurred by Yoon’s impeachment over the weekend. The currency is now trading lower against the dollar at 1,437.55, after rising as much as 0.5% earlier.
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 weighing 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.
Korean regulators have tried to ease nerves. The 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.
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.