Lee Jae-myung Officially Begins Presidential Term, South Korean Stock Market Surges into Bull Market

On Wednesday, the South Korean stock market surged, leading gains in the Asia-Pacific stock markets. This followed the victory of Lee Jae-myung, leader of South Korea's Democratic Party, in the presidential election, ending months of leadership vacuum in the country and eliminating political uncertainty in South Korea

. As of now, South Korea's benchmark stock index, the Korea Composite Stock Price Index (KOSPI), has risen nearly 2.5% to 2,765.97 points, more than 20% above the recent low of 2,293.7 points set in April. This means the index has entered a technical bull market

. Since the beginning of this year, the index has risen more than 15% in total

. In addition, the South Korean won also strengthened today. As of now, the South Korean won has appreciated about 0.5% against the US dollar

. However, South Korean government bonds have underperformed, with the 10-year bond yield rising sharply, reflecting market concerns that the new government may implement expansionary fiscal policies, leading to an increase in bond supply

. As South Korea's election authority confirmed Lee Jae-myung's election, he has officially commenced his presidential term. This has eliminated one of the biggest obstacles affecting the local market—political uncertainty

. In April this year, South Korea's Constitutional Court ruled to uphold the impeachment of Yoon Suk Yeol, who was subsequently removed from the presidency. According to South Korea's Constitution, after the president is absent due to impeachment or other reasons, the country must hold an election to select the next president within 60 days. Therefore, the election originally scheduled for 2027 was brought forward to June 3 this year

. Currently, market focus has shifted to Lee Jae-myung's policies aimed at boosting economic growth, with a focus on increasing government spending, improving corporate governance, strengthening labor protections, and completing ongoing tariff and exchange rate negotiations with the Trump administration

. South Korea's economy contracted in the first quarter of this year, before US President Trump announced a comprehensive tariff increase in early April, highlighting the weakness of the South Korean economy

. Shawn Oh, a stock trader at NH Investment & Securities, said, "Today's (market) focus will be on the new President Lee Jae-myung." He added that the market may react to Lee's commitment to improving corporate governance

. Despite facing political uncertainty and economic downturn, the South Korean stock market and the won have shown resilience this year, outperforming most Asian peers. In April this year, after Yoon Suk Yeol stepped down, the won gained support and became one of the best-performing currencies in Asia

. It is worth noting that during his campaign, Lee Jae-myung stated that his target for the KOSPI index was 5,000 points, but he did not specify a timetable. This goal underscores his emphasis on the stock market, and he has also pledged to boost the valuation of local stocks and end the "Korea Discount" phenomenon.