Market Wrap MENA-Asia 13 July: Seoul Crashes Nearly 9 Percent and Oil Jumps as Gulf Markets Hold Their Ground and Cairo Rises

Monday distributed the weekend’s escalation unevenly. Seoul’s Kospi collapsed 8.95 percent to 6,806.93, a fall Korean media reported was deep enough to trigger the Korea Exchange’s market-wide circuit breaker, while oil’s first session since the strait declaration produced a firm but contained jump, with Brent above 79 dollars, up more than 4 percent, in afternoon trade. The Gulf, closest to the strait, barely moved, and Cairo rose: the EGX30 added 0.67 percent while TASI slipped 0.16 percent, Kuwait’s All Share index rose for a second straight session, and Abu Dhabi’s first response since the weekend was a 0.33 percent dip.

Asia’s pain mapped to the energy bill and the chip cycle rather than to uniform risk aversion, our reading. The Kospi’s 669-point fall closed the index below 7,000, with Korean media reporting the chip complex led the losses and the won weakened sharply. The Nikkei 225 fell 1.92 percent to 67,242.73 and the Topix 0.71 percent to 4,007.49, Shanghai lost 2.06 percent to 3,913.79 and Shenzhen’s component index 3.48 percent to 14,522.85. The other side of the map was flat: Hong Kong’s Hang Seng edged up 0.16 percent to 24,213.72, and India’s Nifty 50 and Australia’s ASX 200 closed within a few points of unchanged.

The oil verdict was measured. Brent traded at 79.23 dollars, up 4.24 percent from Friday’s settlement, and WTI at 74.42 dollars, up 4.22 percent, in the first session since Iran’s IRGC navy declared the strait closed to all transit, per state media reports carried by Reuters; the declaration’s operational effect could not be independently verified at the time of writing. Gold, the panic gauge, fell 1.17 percent to 4,065.60 dollars, and the VIX rose toward 16.4 ahead of the US open. A 4 percent oil move on a declared total closure reads as a market still treating the disruption as manageable and reversible, our reading.

The Gulf’s second session since the escalation was steadier than its first. TASI closed 0.16 percent lower at 10,801.71 with breadth almost exactly balanced at 129 gainers to 128 losers, and the MSCI Tadawul 30 eased 0.26 percent to 1,437.61. Boursa Kuwait extended Sunday’s resilience, the All Share Index up 0.04 percent to 8,679.20 and the Premier Market Index up 0.10 percent to 9,090.81. The UAE delivered its first pricing of the weekend: Dubai’s DFM General Index fell 1.24 percent to 5,967.43, the region’s heaviest move as a shut market caught up, while Abu Dhabi’s FADGI slipped 0.33 percent to 9,903.73. Muscat’s MSX 30 lost 0.44 percent to 7,618.23, Amman’s ASE index fell about 0.47 percent to 3,873.33, our calculation from the exchange’s prints, and Bahrain’s All Share dropped 0.57 percent to 1,999.42, closing below the 2,000 line.

Cairo bucked the regional dip. The EGX30 rose 0.67 percent to 52,608.28, the strongest move among the region’s main indices on the day, with 115 gainers to 86 decliners on the exchange’s summary, a session after the central bank’s balance of payments release showed strong private inflows absorbing a wider trade gap. The Qatar Stock Exchange is suspended for the week under the directives announced Sunday and resumes on 19 July.

In currencies and crypto, the dollar was mixed: the euro firmed 0.12 percent to 1.1427 and the yen weakened 0.25 percent to 162.09 per dollar, sterling eased 0.07 percent to 1.3395, the Kuwaiti dinar held at 0.3077 per dollar, and the Egyptian pound traded at 50.17 to the dollar, 0.62 percent softer. Bitcoin fell 2.51 percent to 62,547.

Further west, Friday’s closes from our previous wrap remain the last full prints: the S&P 500 rose 0.42 percent to 7,575.39, the Nasdaq 0.29 percent to 26,281.61 and the Dow 0.29 percent to 52,637.01, while in Europe the FTSE 100 added 0.24 percent to 10,497.29 and the CAC 40 0.15 percent to 8,338.97, with the DAX down 0.20 percent at 25,067.09 and the Euro Stoxx 50 off 0.23 percent at 6,269.97. Monday’s European session was trading roughly flat by mid-afternoon, the FTSE off 0.2 percent and the DAX and CAC little changed, while US equity futures pointed modestly lower ahead of the open, with S&P futures down about 0.4 percent.

Why it matters: The market closest to the threat moved least, and one of them rose. Two sessions into the escalation, the Gulf’s equity complex has repriced by fractions of a percent and Cairo has advanced, while Korea, half a world away, lost almost 9 percent in a day, because the transmission channel is the energy import bill and the technology cycle, not proximity. That vindicates the buffers story the rating agencies keep writing about the Gulf, and it concentrates the real economic damage in Asia’s energy importers, the customers Gulf exporters depend on. Dubai’s catch-up decline also shows what reopening after a shut weekend costs.

Outlook: The immediate markers: US CPI lands Tuesday at 12:30 UTC with Chair Warsh’s first House testimony ninety minutes later, China’s June trade data with the crude import volume the region watches is expected within days alongside Wednesday’s second-quarter GDP, and the Bank of Korea decides Thursday with an equity crash now in the room. OPEC’s July monthly report, published Monday, frames the oil balance into those releases.

Table – MENA and Asia equities, 13 July close, ranked by change:

Table – US and Europe, Friday 10 July closes, for reference, ranked by change:

Table – Commodities, rates, volatility, FX and crypto, intraday 13 July:

Sources: Saudi Exchange; Boursa Kuwait; Egyptian Exchange; Bahrain Bourse; Dubai Financial Market; Abu Dhabi Securities Exchange; Amman Stock Exchange; Muscat Stock Exchange; Qatar Stock Exchange; Reuters; CNBC.

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