Wednesday's contest is expected to be a tight one between conservative Park Geun-hye and her left-wing challenger, Moon Jae-in. Moon has been vocal about reforming South Korea's family-owned large conglomerates, which account for the bulk of the country's economy, while Park has shied away from advocating substantial change. "Even if Moon is elected, he is unlikely to bring drastic reforms of chaebols in this unfavourable economic environment. A Park victory would help ease policy uncertainty, but I'm not sure whether her win will do more than that," said Cho Byung-hyun, an analyst at Tongyang Securities.
The domestic stock markets will close on Wednesday for the elections. Hyundai Motor fell 0.4 percent, while Kia Motors lost 0.8 percent. Shares in Korean Air Lines were up 2.3 percent after the flag carrier abandoned its bid for an estimated $1.1 billion stake in Korea Aerospace Industries (KAI). Shares in KAI, the country's sole aircraft maker, fell 3.2 percent on the news. Foreigners were net buyers of 230.4 billion Korean won ($214.83 million) of KOSPI shares, buttressing the index. The KOSPI 200 benchmark of core stocks rose 0.6 percent, while the junior KOSDAQ edged 0.5 percent lower.