SEOUL: Seoul shares experienced a fourth consecutive day of decline on Monday, impacted by ongoing domestic political instability following a brief declaration of martial law. The South Korean won continued its downward trend, marking its fifth consecutive day of depreciation against the U.S. dollar.
According to Yonhap News Agency, the Korea Composite Stock Price Index (KOSPI) fell by 5.28 points, or 0.22 percent, closing at 2,399.49 on the last trading day of 2024. Trade volume remained low, with 239 million shares changing hands, valued at 3 trillion won (approximately US$2.04 billion). The number of declining stocks significantly outpaced gainers, with 803 losers compared to just 115 gainers.
Foreign investors were net sellers, offloading 172.5 billion won, while individual investors purchased a net 214 billion won. Institutional investors also contributed to the selling pressure, with a net sell-off of 114 billion won.
The South Korean financial markets have been under pressure due to heightened political uncertainty following President Yoon Suk Yeol's brief martial law declaration on December 3. This led to his impeachment and the subsequent impeachment of acting President Han Duck-soo, leaving Finance Minister Choi Sang-mok as the interim leader.
Further complicating the economic landscape are the high tariffs and policy shifts anticipated under the incoming Trump administration, adding additional pressure to the local stock market.
Lee Kyung-min, a researcher at Daishin Securities, noted, "While there was some optimism for a breakthrough in the run-up to the passage of the president's impeachment motion, the prolonged phase of political uncertainties is raising concerns about the potential negative impact on South Korea's international credibility."
The stock market decline was led by chipmakers and automotive shares, with Samsung Electronics and Hyundai Motors both registering losses. Financial stocks and shipyards also ended in negative territory, with KB Financial and HD Hyundai Heavy Industries both declining.
Aviation stocks were particularly hard hit following a Jeju Air plane crash on Sunday that resulted in 179 fatalities, marking the worst aviation disaster in South Korean history. Shares of Jeju Air and its parent company Aekyung Holdings plummeted as a result.
In contrast, shares of bio companies and refiners showed resilience, with Samsung Biologics and SK Innovation seeing gains.
The won was trading at 1,472.50 per U.S. dollar at 3:30 p.m., the lowest level since the aftermath of the global financial crisis in 2009. This year, the won has depreciated by 184 won, marking one of the weakest performances globally.
Bond prices increased, with yields on government bonds moving inversely. The yield on three-year Treasurys dropped by 3.7 basis points, while five-year government bond yields fell by 2.1 basis points.
South Korea's financial markets are scheduled to open an hour later than usual at 10 a.m. on January 2, 2025.