Asian equities stumbled on Wednesday while currencies were volatile as traders scrambled to contend with the political storm in South Korea, where martial law was imposed and subsequently lifted hours later.
That left the MSCI’s broadest index of Asia-Pacific shares outside Japan, which counts Samsung Electronics as one of its top constituents, down 0.32 per cent on Wednesday. “We are concerned that these events could impact South Korea’s sovereign credit rating, although this is uncertain at this stage. However, this is a scenario that could happen.”
Still, the jolt to the market from East Asia stoked further worries of uncertainties around the globe, with investors already reeling from the political turmoil in France that has weighed on the euro, which was down 0.11 per cent at $1.04975. On the macro side, investors are hoping for more cues to gauge the policy path the Federal Reserve will likely take next year, with much-anticipated November employment report due on Friday.
U.S. central bankers said they continue to believe inflation is heading down to their 2 per cent target and signalled support for further rate cuts ahead, but none pushed strongly for or against doing so when they next meet to set rates in two weeks.