Stock Price "Temporary Volatility Unavoidable Due to Account-Related Issues... Responding to Sudden Price Changes"

Stock Price "Rapid Company Fundamental Changes Are Not Expected"

"Account Restrictions Lifted Quickly, Maintaining a Stable Outlook"

Government "Normal Operation of Stock and Foreign Exchange Markets"

The stock market on the 4th, following the lifting of non-account restrictions, stated that "temporary volatility due to political instability is unavoidable," but also analyzed that "the rapid lifting of account restrictions allows for a positive interpretation, making strategies to respond to sudden price changes effective."

Jung-Hwan Na from NH Investment & Securities Research Institute mentioned, "The rapid resolution of non-account restriction issues suggests that the expansion of volatility in the Korean financial market could end as a temporary phenomenon," adding that "as much as Korea is committed to providing unrestricted liquidity, there is a possibility for strategies to respond to sudden price changes if the stock price fluctuates excessively."

However, he warned that "if foreign investors temporarily exit the Korean stock market, there could be a situation where stock prices rapidly decline," emphasizing that "this issue is not a fundamental change in the Korean stock market, and strategies to respond to sudden price changes are effective."

Min-Sik Lee from Daishin Securities Research Institute stated, "After this incident, the expansion of political uncertainty domestically is unavoidable, but the rapid lifting of non-account restrictions and the stabilization of volatility and overnight markets have mitigated the shock to the financial market, making the impact limited."

He also predicted, "Especially as the domestic stock and foreign exchange markets are located in a very low valuation area, there is a high possibility of finding gradual stability," adding that "the existing stock market outlook ('year-end rally expectations') and investment strategies are maintained."

Korea Exchange decided to open the stock market normally on this day.

Despite concerns about financial market turmoil due to the non-account restriction announcement made around 10:25 PM the previous night, the market opened normally following the resolution of the account restriction proposal in the National Assembly and its lifting in the early morning at the State Council meeting. Accordingly, cash trading is possible from 9 AM, and futures trading is possible from 8:45 AM.

President Seok-Yeol Yoon lifted the non-account restriction at around 4:27 AM at the Yongsan Presidential Office through a live broadcast.

With the announcement of the non-account restriction and the report from the Account Management Department, Korea entered a non-account restriction at 11 PM the previous night. At 1 AM, the non-account restriction proposal was approved in the plenary session with all 190 members of the National Assembly present voting in favor. Consequently, the account management team that had been dispatched to the National Assembly was withdrawn.

Following the non-account restriction announcement, the foreign exchange market, which had been fluctuating, is stabilizing after the lifting of the restriction.

At 2 AM on this day, the won-dollar exchange rate closed at 1,425.00 won, up 23.70 won from the previous day's closing price of 1,401.30 won, in the Seoul foreign exchange market's weekly trading (9 AM to 3:30 PM). After the account restriction announcement, the exchange rate showed a rapid increase as safe asset preference surged, reaching the 1,440 won range, but it partially reduced the sharp rise.

KOSPI200 futures also surged up to 5.48% overnight, but by 5 AM on this day, it reduced the surge to 1.8%.

Jung-Dong Roh, Hankyung.com reporter dong2@hankyung.com