(Bloomberg) -- South Korea’s equity benchmark climbed on Friday, recovering most of the losses triggered by President Yoon Suk Yeol’s failed bid to impose martial law.
The Kospi Index closed 0.5% higher, gaining for a fourth day. The gauge briefly traded above the closing level of Dec. 3, when Yoon stunned the nation with his late-night announcement of the emergency order, before revoking it just hours later.
Stocks have been regaining ground amid growing expectation that the political uncertainty may ease if the parliament’s second impeachment vote against Yoon is passed on Saturday. More lawmakers from his party have indicated they will support the motion this time around.
“If Yoon gets impeached, initial reaction can be positive, because Yoon’s impeachment eliminates whatever uncertainty that is stemming from him,” said Shawn Oh, an equities trader at NH Investment & Securities Co. in Seoul. “But upside is still capped on political uncertainty. So short-term positive, but mid-term neutral.”
Gains in South Korea’s equities have bucked a broader selloff in the region. The small-cap Kosdaq index advanced 1.5%, rising above the level seen before the short-lived martial law decree.
There are ongoing concerns over the prospect of the country’s export-oriented economy, given a slowdown in China and uncertainties over US trade policy.
In the longer term, questions remain over whether there are elements to support a rise in valuations and a reversal of slowing earnings momentum, said Frank Benzimra, a strategist at Societe Generale HK. “Whatever the political outcome, I don’t think that is the case,” he said.
--With assistance from Winnie Hsu and Abhishek Vishnoi.
(Recasts headline, lead. Adds analyst comment in last paragraph)
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