“People panicked because it was so unexpected,” said Choi Kwang-hyeok, an analyst at eBest Investment and Securities in Seoul. 

“It seems we’re entering a new season of uncertainty and volatility.” 

Britons chose a withdrawal from the EU in a referendum, an outcome that was feared by global investors for its potential shock on the fragile world economy and financial markets. 

Although it will take two years for the country to negotiate the terms of its departure with the EU, the shock was felt immediately on markets across the globe, including Korea. 

The pound tanked, while the dollar and the Japanese yen gained ground. Currencies and stocks in the emerging world took a battering as global woes sapped the investor appetite for riskier assets. 

The KOSPI closed at 1,925.24 points, down 3.09 percent from the previous close, while the tech-heavy KOSDAQ shed 4.76 percent to 647.16 points. The won had its worst day in nearly five years, falling 2.58 percent against the dollar to 1,179.9. 

“Given the U.K.’s presence in global financial markets, it is unlikely that the local foreign exchange market will stabilize easily or any time soon,” said Jeon Seung-ji, a fixed-income analyst at Samsung Futures. 

Hyundai Securities’ Ryu Yong-seok said how Korean markets will move from now on depends partly on the government’s measures, which should come out soon, to mitigate the fallouts. 

“The KOSPI could retreat to a range of 1830 to 1850 points,” he said, predicting a sizable outflow of global funds in the short term. 

Government officials, holding a series of emergency meetings Friday, sought to soothe concerns, saying Korea’s exposure to the U.K. is not big. 

Vice Finance Minister Choi Sang-mok said in one such meeting that the government will use “all means possible” to minimize the impact of “Brexit” on the Korean economy. He also said that Korea’s large foreign reserves and trade surplus should help it weather the external shock. 

Korea’s exports to the U.K. amounted to $7.3 billion in 2015, accounting for just 1.4 percent of all shipments. U.K. investment in Korea totaled $260 million, 1.2 percent of the total received by Korea. 

On the securities market, however, the U.K. is the second-largest foreign investor after the U.S., holding 36.4 billion won ($30.9 million) worth of local stocks. British money accounts for nearly 10 percent of all foreign capital in the markets. 

Jeong Gyu-cheol, an economist at Korea Development Bank, said Brexit is unlikely to become a major downside risk to the Korean economy. The impact will be on financial markets, rather than the real economy, he added. 

“Due to Korea’s low exposure to the U.K., I expect the Brexit to have no major impact on Korea’s projected growth,” he said.

By Lee Sun-young (milaya@heraldcorp.com)