Seoul stocks drop on S.Korea woes; most Asian markets rise / Photo: © AFP
Seoul stocks drop on S.Korea woes; most Asian markets rise
South Korean stocks fell more than one percent Monday as the country was racked with political uncertainty after President Yoon Suk Yeol averted impeachment following his brief imposition of martial law last week.
The retreat came on a broadly upbeat day for Asian markets despite another record on Wall Street, while traders were also awaiting a high-level economic meeting in China and keeping tabs on Syria after President Bashar al-Assad's removal.
Equities in Seoul pared their initial losses of more than two percent but investors remained on edge after a near-total boycott of Saturday's impeachment vote by Yoon's People Power Party (PPP) doomed it to failure.
However, the main opposition party said Sunday it would try again, while police arrested the defence minister in charge of the martial law operation and the interior minister resigned.
They and Yoon are being investigated for alleged insurrection.
The crisis has fuelled concerns about Asia's number four economy, which was already struggling and faces further pain as Donald Trump heads back to the White House threatening to resume his hardball trade policy.
Michael Wan at MUFG said the hit to the country's markets "may include slower tourism inflows, weaker domestic demand, and a dent to corporate sentiment, especially if street protests become more vociferous and the Budget passage remains in stalemate".
"South Korea was already one of the more vulnerable forex markets in Asia to Trump 2.0's policies, and the political uncertainty also comes at a juncture just when leadership is needed to navigate these significant global policy shifts."
The won was trading at around 1,431 per dollar Monday, compared with 1,413 on Friday.
Shanghai and Hong Kong stocks advanced as top Chinese officials prepare to hold a two-day economic work conference to outline their targets and stimulus plans for next year.
The gathering comes as Beijing prepares for Trump's second presidency amid concerns of another painful trade war between the superpowers.
Data released Monday showed Chinese consumer prices rose less than expected last month, reinforcing the need for more support following a raft of measures at the end of September.
Elsewhere in Asia, Tokyo, Taipei, Jakarta and Wellington also rose while Sydney and Singapore fell.
Traders had been given a healthy lead from Wall Street, where the S&P 500 and Nasdaq both ended at record highs after figures showed the US economy added more jobs than forecast last month.
Focus is now on the Federal Reserve's policy meeting next week when it is tipped to cut interest rates again.
Meanwhile, the euro remained on the back foot but slightly stronger than last week when it took a hit after France's new government fell after a no-confidence vote.
President Emmanuel Macron, who had faced calls to step down, lifted sentiment when he said would serve out his term and that a budget could be passed in the coming weeks.
Macron held talks with French political leaders on the left and right on Friday as he sought to quickly name a new prime minister after Michel Barnier's ouster over his 2025 budget plan.
- Key figures around 0230 GMT -
Tokyo - Nikkei 225: UP 0.3 percent at 39,197.57 (break)
Hong Kong - Hang Seng Index: FLAT at 19,868.74
Shanghai - Composite: UP 0.5 percent at 3,419.69
Seoul - Kospi Index: DOWN 1.7 percent at 2,387.14
Euro/dollar: DOWN at $1.0554 from $1.0566 on Friday
Pound/dollar: UP at $1.2741 from $1.2740
Dollar/yen: DOWN at 149.95 yen from 149.97 yen
Euro/pound: DOWN at 82.85 from 82.93 pence
West Texas Intermediate: UP 0.5 percent at $67.56 per barrel
Brent North Sea Crude: UP 0.5 percent at $71.46 per barrel
New York - Dow: DOWN 0.3 percent at 44,642.52 points (close)
London - FTSE 100: DOWN 0.5 percent at 8,308.61 (close)
(W.Uljanov--DTZ)
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