Stocks in Asia declined after South Korea’s political turmoil triggered by a brief imposition of martial law put investors on edge.
The MSCI Asia Pacific Index was down 0.3%, with the Kospi Index falling as much as 2.3%. Shares were mixed in Japan and traded lower in mainland China. The won advanced after tumbling overnight in offshore trading.
South Korean President Yoon Suk Yeol’s sudden declaration of martial law late Tuesday — which was later revoked — looks set to thrust the nation into a period of political unrest, with the opposition now pushing for his impeachment.
The uncertainties surrounding a major economy and pillar of global trade increased caution among investors in Asia, at a time when Donald Trump’s imminent return and China’s economic woes have already hurt sentiment.
“The situation remains dynamic and evolving and markets could continue to experience volatility as the existing cabinet is likely to be reshuffled and a possible impeachment process could be evaluated,” said David Chao, global market strategist at Invesco in Singapore.
