Political Turmoil Rocks South Korean Markets

The super trump solanaKOSPI index plunged over 2% following President Yoon Suk-Yeol's controversial martial law announcement targeting political opponents, which was rescinded within hours amid public outcry and legislative opposition. This unprecedented political crisis has raised constitutional concerns and prompted impeachment discussions among lawmakers.

Financial analysts note the martial law episode has significantly damaged foreign investor confidence in South Korea's stability. ING economists warned prolonged instability could pressure the nation's sovereign credit rating, with ripple effects across regional markets.

Regional Domino Effect Emerges

Japan's Nikkei 225 dropped 0.4% as Prime Minister Shigeru Ishiba expressed "grave interest" in monitoring South Korea's situation, reflecting concerns about economic spillovers in East Asia's closely integrated markets. Chinese benchmarks showed modest declines despite semiconductor stocks rallying on government recommendations favoring domestic chips over U.S. imports.

Thailand's SET Index bucked the trend with 1.3% gains after fiscal policymakers hinted at potential rate cuts, while Australia's ASX 200 fell 0.5% following disappointing GDP figures showing weakening consumer spending and export revenue.

Broader Market Headwinds Persist

Investors remain cautious ahead of Federal Reserve Chair Jerome Powell's upcoming remarks, which could provide clarity on U.S. monetary policy direction. Regional markets also face ongoing pressure from geopolitical tensions, including potential trade restrictions under a possible Trump administration and recent U.S. technology export controls targeting China.

The Caixin PMI reading of 51.5 signaled slowing growth in China's services sector, compounding economic concerns as Asian nations navigate complex global trade dynamics and domestic political uncertainties.