Election Leaves S. Korea in a Political Standoff : Government: No party wins an Assembly majority in the splintered vote. Some fear renewed turbulence.

A humiliating electoral defeat for the ruling Democratic Liberal Party threw South Korea into paralysis Wednesday as the splintered vote left no party strong enough to carry out its policies and sparked fears of a return to political turbulence.

In aftershocks from elections for the National Assembly, where the ruling party’s share fell to 49% from 72%, cries mounted for the resignation of Kim Young Sam, the former opposition leader who joined forces with President Roh Tae Woo two years ago and had hoped to succeed him next year.

Kim apologized for his party’s performance but remained silent on his future. Some party officials warned of grave consequences if he is forced to resign before December’s presidential election.

“Some people are saying Kim Young Sam should resign, but it’s not that easy,” said Suh Sang Mok, director general of the Democratic Liberal Party’s policy coordination office. “It may mean the breakup of the party.”

Kim Jong Pil, the other opposition leader who joined in the publicly unpopular merger of three parties in 1990, announced his resignation Wednesday as one of the party’s co-chairmen.

President Roh, who called for the party’s “rebirth” and said it erred in its “arrogant attitude” after the merger, is expected to announce a Cabinet reshuffle in the next several days.

Meanwhile, Suh and some critics of his party expressed fears that the surprisingly strong showing by industrialist Chung Ju Yung, founder of the Hyundai chaebol (conglomerate), could further weaken the economy by shattering the unity of the corporate community and dangerously blurring lines between business and politics.

In one indication, Hyundai shares rose while those of archrival Daewoo and other chaebols fell as investors reacted to fears that politicians affiliated with Chung’s group could freeze competing conglomerates out of big-ticket projects and other business activities.

Registering the anxieties, the South Korean stock market plunged as investors fearing political unrest dumped holdings.

Some observers voiced concerns that the nation could be forced to change its economic policies at the whim of Hyundai. The group, with 41 firms and reported annual sales of $51 billion, is South Korea’s second largest conglomerate.

Han Sang Kyu, a spokesman for Chung, said, however, that the tycoon would make a clear distinction between business and politics.

“Our clear-cut objective is to realize the transfer of power to a civilian government from the past military dictatorship,” Han said in an interview at his party headquarters.

Chung’s two-month-old Unification National Party won 10% of the seats.

At the headquarters of the largest opposition party, the Democratic Party led by longtime opposition figure Kim Dae Jung, officials were not entirely happy with their electoral success, in which they won nearly one-third of the 299 seats in Parliament.

Unlike the results of the national elections in 1988, when three opposition parties gained a combined 58% of the seats, the margins from Tuesday’s voting were too narrow to give the Democrats much maneuvering room against Roh and the ruling party, Democratic Party Assemblyman Lee Chul said.

There were also 21 unaffiliated winners, and Lee noted that all but one of them are former Democratic Liberals who had failed to get their party’s nomination and now probably will return to Roh’s fold. In addition, he said, Chung was a conservative industrialist who collaborated with repressive regimes in the past and will probably cooperate with the ruling party.

As a result, he said, the Democrats will probably not be able to call a parliamentary committee hearing into Roh’s “misdeeds,” including allegations of illegal contributions from business groups. On the other hand, the ruling party will not be able to pursue its aims of a constitutional amendment to change to a parliamentary cabinet system, he added.

“It’s chaos,” said Lee, a former dissident once sentenced to death. “Renovation of policy will be impossible.”

Han, Chung’s spokesman, rejected the possibility of the Nationalists’ joining the governing party.

“To merge with the ruling party is unimaginable, unthinkable,” he said. “We intend to become the ruling party.”

Chung himself said he will take the next few months to test the political waters before announcing whether he will run for president.

Meanwhile, speculation began over who might challenge Kim Young Sam for the ruling party’s nomination. Among the possible candidates are Park Tae Joon, chairman of the Pohong Steel Corp., Lee Jong Chan, a former intelligence official, and Park Chul Un, a cousin of Roh’s wife.

“There is no consensus,” Suh said. “We are all still in the thinking stage because no one expected this outcome.”

Times staff writer Sam Jameson contributed to this article.