Seoul's stock market saw heightened volatility on Monday, the first trading session following President Yoon Suk Yeol's suspension over the weekend.

The benchmark Kospi opened at 2,511.08, up 16.62 points from Friday's close, briefly reaching 2,515.62 in the morning before reversing. By 2:30 p.m., the Kospi was down 0.3 percent at around 2,488, driven by a heavy selloff from foreign investors, who offloaded a net 490 billion won ($341.5 million). Individual investors supported the market with net purchases of 400 billion won, while institutional investors had net sold 9 billion won.

The tech-heavy Kosdaq rose 0.48 percent to hover at 697 in the afternoon, buoyed by individual investors, who net bought 200 billion won. Foreigners and institutions offloaded 130 billion won and 62 billion won, respectively.

While the passage of the impeachment motion in the National Assembly on Saturday marked a step toward political stabilization, experts warn of growing downward pressure due to weak momentum and caution ahead of key events.

"Although uncertainty around the impeachment has eased, upcoming events like the Federal Open Market Committee and Bank of Japan meetings this week are keeping markets on edge," said Lee Kyung-min, a researcher at Daeshin Securities.

Over 20 countries are deciding key interest rates this week, with the US Federal Reserve expected to cut rates by 0.25 percentage points during its FOMC meeting on Dec. 17-18, while the BOJ is likely to keep rates unchanged on Dec. 18-19.

Lee also noted that the Kospi is adjusting after last week's four-day uptrend, which marked a swift recovery from President Yoon’s Dec. 3 martial law declaration. "The Kospi gained nearly 130 points last week, so a pullback from early price adjustments is likely," Lee said.

The Kospi, which closed at 2,500 on Dec. 3 just before martial law was imposed and lifted six hours later, fell to a low of 2,360.58 by last Monday, then rebounded with four consecutive days of gains.

Jo Jae-un, a quant strategist at Daeshin Securities, said while quick value enhancement cannot be guaranteed, the current market price remains attractive in the long-term. "Favorable external conditions and a recovery in foreign capital suggest that a long-term strategy extending into the first half of 2025 remains viable," Jo said.

He also emphasized that strong fundamentals are crucial for long-term improvement. "The correlation between Kospi performance and returns held in the second half of this year, despite the downturn, and this trend is likely to continue into 2025. Focusing on earnings-driven fundamentals is even more crucial in times of uncertainty," Jo said.

As South Korea braces for months of political turmoil with the start of the impeachment process, economic leaders expressed confidence in managing market instability.

"Most of the previous losses (from the martial law shock) were reversed last week thanks to proactive stabilization measures by the government and central bank, along with sustained buying from institutional investors," Finance Minister Choi Sang-mok said during a meeting with top economic officials, including Bank of Korea Gov. Rhee Chang-yong, on Monday.

Government bond yields held steady, and the foreign exchange market, which had seen heightened volatility, gradually stabilized, Choi added.

The officials pledged to maintain continuous market monitoring, accelerate key policies and strengthen efforts to uphold external credibility and investor relations.

Meanwhile, the local currency strengthened against the greenback on Monday, trading at 1,434.6 won per US dollar at 2:30 p.m., a decrease of 1.6 won from the previous session.