The domestic stock market is rapidly freezing as the ruling and opposition parties face off over the sudden declaration of martial law and subsequent impeachment of the president. The Korean stock market has hit a new low on the 9th after the impeachment vote failed, raising concerns about a recession in the economy and industry as a whole.

On the 9th, the domestic stock market closed down 2.78% (corrected after the market closed at 3:30 PM) during the day, with the 2,400 mark broken. KOSDAQ also recorded a low minus 5%, with individual investors showing a selling trend overall.

Deputy Prime Minister and Minister of Strategy and Finance Choi Sang-mok is mobilizing all available resources, including the Stock Stabilization Fund and Value-Up Fund, to prepare for market shocks.

According to the Ministry of Strategy and Finance, the government and the Bank of Korea will operate a bond market stabilization fund worth up to 40 trillion won and purchase corporate bonds and commercial paper (CP), while providing unlimited liquidity until the stock, bond, short-term fund, and foreign currency fund markets are fully normalized.

30 billion won of value-up fund funds have already been invested in the stock market, and 70 billion won will be sequentially executed this week and 30 billion won next week. It has been reported that a second fund of 300 billion won will be additionally created next week.

However, due to panic selling by individual investors, KOSPI fell to 2,360 and KOSDAQ fell to 627, renewing their lows. On this day, Samsung Electronics closed at 53,400 won (-1.29%), with individual and foreign investors showing a selling advantage. On the other hand, SK Hynix showed a stock price defense by closing at 168,900 won (+1.08%) due to buying by foreign and institutional investors.

Amid the unprecedented situation in which government administration and National Assembly legislation have virtually come to a halt due to the martial law and lifting of martial law by the Yoon administration and subsequent impeachment, concerns are growing again about gaps in support laws targeting domestic companies, such as the Special Act on Semiconductors.

In addition, the current impeachment situation is one in which the budget bill for next year has not even been passed, increasing uncertainty about next year's research and development (R&D) spending, and the sense of crisis surrounding industry and the economy is growing.

As former US President Donald Trump is set to be inaugurated as the 47th US President on January 20th of next year, the Korean government, which will respond to Trump’s second term, has effectively suspended its economic and industrial diplomacy. As the Trump administration’s tariff bomb and subsidy abolition are expected, public-private cooperation is urgently needed to respond to these.