| Company | Value | Change | %Change |
|---|
The benchmark Kospi Index fell as much as 2% early Wednesday after South Korea-related assets all dropped overnight. Equities also slipped in Sydney, and opened little changed in Tokyo. The won advanced after losses overnight in offshore trading.
Yoon stunned investors by declaring martial law on Tuesday. The surprise move by a major economy and pillar of global trade increased caution on Wall Street, where the S&P 500 edged higher to notch its 55th record this year. Investors are looking to this week’s key jobs data and Jerome Powell’s remarks for clues on whether the Federal Reserve will cut rates in December.
“We expect some volatility today,” said Jung In Yun, chief executive at Fibonacci Asset Management Global Pte. “Short term, this will be a buy opportunity. Long-term, the Korea discount problems will persist and act as a headwind for growth.”
The iShares MSCI South Korea exchange-traded fund sank as much as 7.1% in US trading, while London-listed shares of Samsung Electronics lost as much as 7.5%. Bank of Korea’s monetary board, which unexpectedly cut the key rate last week, will hold an extraordinary meeting to discuss steps to shield the economy and markets.
“Markets interpreted developments as being a domestic political issue but nevertheless, it was a reminder of elevated political risk globally,” ANZ Group Holdings Ltd. analysts Brian Martin and Daniel Hynes said in a note.
The S&P 500 was little changed on Tuesday. The Nasdaq 100 added 0.3%. Treasury 10-year yields advanced three basis points to 4.22%.
Just a few days ahead of the US payrolls report, data showed job openings picked up while layoffs eased, suggesting demand for workers is stabilizing. Fed Bank of San Francisco President Mary Daly said a rate cut this month isn’t certain, but remains on the table.
“The question for investors isn’t ‘will the Fed cut again’ but rather ‘will the next cut be in December or January’,” said Lauren Goodwin at New York Life Investments. “Our base case is that the Fed cuts 25 basis points in December, but we have much higher confidence that another cut is coming in December or January as the data evolves.”
Oil steadied after the biggest advance in more than two weeks as OPEC+ made progress toward a deal to delay further the restoration of shuttered supply, and the US imposed more sanctions on Iranian crude.
