South Korea Implements Short-Selling Ban, Triggering Major Stock Rally

South Korean stocks experienced their biggest rally since March 2020 after the country reimposed a full ban on short-selling. The ban, which will last until June 2024, aims to address concerns raised by retail investors ahead of the upcoming elections. While the move may appease retail investors, it could deter foreign funds from participating in the equity market and complicate South Korea's bid for developed-market status in MSCI Inc.'s indexes. The ban led to a surge in trading volumes, with overseas investors covering short positions. However, critics argue that the ban may hinder market transparency and attractiveness, potentially impacting the country's long-term credibility on the global stage.