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Korean Stocks Gain After Losing $100 Billion to Political Crisis – Yahoo Finance

(Bloomberg) — South Korean stocks rose on Tuesday, on track for their first daily gain since a brief period of martial law last week plunged the country into political turmoil. The won rose slightly against the dollar.

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The Kospi index rose as much as 2.4% in morning trading after recent declines pushed the benchmark to the brink of bear market territory. The Kosdaq small-cap index rose more than 4%. The market capitalization of companies included in the two benchmarks fell by $100 billion in the four sessions ending Monday.

The rebound comes as authorities have described recent market movements as “excessive” given the country's economic fundamentals and reiterated that they will take all steps to stabilize sentiment. . Investors are grappling with growing uncertainty as opposition parties continue to demand the removal of President Yun Seok-Yeong, who narrowly survived last weekend's impeachment vote.

Read: South Korean stocks and won slump as political crisis deepens

While Tuesday's progress brings some relief, markets could once again be volatile as political wrangling continues. Yun has been banned from traveling abroad amid a series of martial law-related investigations, and local reports say the ruling party plans to release a roadmap for the president's “orderly exit” on Tuesday.

“This is just a reversal of recent developments, and there's really not much change on the political front,” said Marcello Songsu Ahn, portfolio manager at Quad Investment Management. ”

Even before the political drama unfolded, South Korean stocks were already among the world's worst performers this year, with Donald Trump's election victory and China's fragile economic outlook weighing on the trade-dependent economy. The lackluster performance of Samsung Electronics, the country's largest electronics company, also weighed on the market.

On Tuesday, the won rose 0.4% to 1,425.50 won to the dollar, while the country's three-year bond futures fell. The South Korean currency has underperformed its Asian peers, having fallen nearly 10% against the dollar this year.

–With assistance from Winnie Hsu and Hooyeon Kim.

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