South Korean markets traded sharply lower on Wednesday following a dramatic political upheaval that saw President Yoon Suk Yeol briefly impose and then quickly withdraw martial law after facing parliamentary opposition.

What Happened: The benchmark Kospi index fell 1.15% to 2,471.27, while the tech-heavy Kosdaq 100 dropped 2.64% as of 9:49 am local time, according to data from Benzinga Pro.

The political uncertainty particularly affected major technology and industrial stocks, with Samsung Electronics Co. SSNLF declining 1.12%.

NVIDIA Corp NVDA supplier SK Hynix HXSCF saw its shares drop 0.061%. Other industrial heavyweights also suffered, with Hyundai Motor HYMTF falling 0.70% and U.S.-listed Posco Holdings Inc PKX declining 4.36% to $47.77 on Tuesday’s regular session. Still, the stock recovered marginally in after-hours trading.

U.S.-based funds tracking South Korean equities showed signs of recovery in after-hours trading, with the iShares MSCI South Korea ETF EWY rebounding 0.25% after earlier losses exceeding 6%. The Franklin FTSE South Korea ETF FLKR gained 0.53% after hours.

The political turbulence also impacted currency markets, with the South Korean won weakening 0.21% against the U.S. dollar to 1,416.65.

The market reaction highlights South Korea’s crucial role in global supply chains, particularly in semiconductor manufacturing and automotive production, where many companies serve as essential suppliers to major U.S. firms.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.