Market Wrap MENA-Asia 14 July: Saudi Leads Gulf Lower and Cairo Slips as Asia Rebounds and Oil Nears 87 Dollars

By The Edge Research Team

Asia rebounded on Tuesday while oil kept climbing and the day’s hardest number landed in Beijing. Seoul’s Kospi closed 0.73 percent higher at 6,856.83 after Monday’s crash, China led the region with Shenzhen up 2.77 percent, and Brent traded at 86.50 dollars, up 3.84 percent from Monday’s settlement, as Chinese customs data showed June crude imports down 41.3 percent from a year earlier. The Gulf drifted lower in quiet sessions, with TASI down 0.80 percent in its biggest daily decline since the escalation began, our calculation from the session record, and Dubai down 1.28 percent a second day, while Amman jumped 1.02 percent and Cairo gave back 0.59 percent.

Asia’s bounce was broad but nervous. The Kospi’s 0.73 percent recovery to 6,856.83 came in a session Korean media described as swinging violently before foreign and institutional buying steadied the close, with the chip heavyweights rebounding. The Nikkei 225 rose 0.74 percent to 67,743.50 and the Topix 0.79 percent to 4,038.98, Shanghai added 1.36 percent to 3,967.13, Shenzhen’s component index 2.77 percent to 14,924.87 and Hong Kong’s Hang Seng 0.52 percent to 24,340.73, while India’s Nifty 50 slipped 0.66 percent to 24,052.05.

The Beijing release is the one the Gulf will read twice. China’s June trade boomed in aggregate, with exports up 27.0 percent from a year earlier and the surplus at 125.6 billion dollars per the customs release as carried by CNBC, but crude oil imports fell 41.3 percent year on year to about 29.3 million tons, a level Bloomberg’s coverage put near a decade low, with first-half volumes down 11.4 percent. The world’s largest crude buyer imported dramatically less through the disruption even as its wider trade accelerated, our reading: the war is rerouting China’s trade, not stopping it, and while the customs totals do not break down the cut by origin, the disrupted route runs through the Gulf, leaving the region’s exporters facing higher prices on sharply weaker aggregate demand from their largest customer.

Oil extended anyway. Brent’s 86.50 dollar print, up 3.84 percent, builds on Monday’s 9 percent surge after the announced blockade on Iranian shipping, covered in our commodities wrap, and WTI crossed 80 dollars, up 2.51 percent at 80.10. Gold recovered the 4,000 dollar line, up 0.69 percent at 4,033.40, and the VIX held near 17.3 ahead of a US session stacked with June CPI at 15:30 Kuwait time and Chair Warsh’s House testimony ninety minutes later.

The Gulf’s third session since the escalation stayed contained but tilted lower. TASI fell 0.80 percent to 10,715.61 with 73 gainers to 184 losers, and the MSCI Tadawul 30 lost 0.89 percent to 1,424.85. Boursa Kuwait’s All Share Index eased 0.24 percent to 8,658.52 and the Premier Market Index 0.13 percent to 9,078.73. Dubai’s DFM General Index fell 1.28 percent to 5,890.99, extending Monday’s catch-up decline, Abu Dhabi’s FADGI lost 0.52 percent to 9,852.27, Bahrain’s All Share slipped 0.47 percent to 1,990.09 and Muscat’s MSX 30 eased 0.21 percent to 7,602.59 on the exchange’s pre-closing print. Amman was the outlier, the ASE index jumping 1.02 percent to 3,912.68, our calculation from the exchange’s prints. The Qatar Stock Exchange remains suspended and resumes on Sunday.

Cairo joined the regional tilt at its later close: the EGX30 fell 0.59 percent to 52,299.31, giving back most of Monday’s gain after touching 52,626 early in the session.

In currencies and crypto, the dollar gave back a little: the euro rose 0.15 percent to 1.1398 and sterling 0.23 percent to 1.3377, the yen firmed 0.14 percent to 162.20 per dollar, the Kuwaiti dinar held at 0.3077, and the Egyptian pound weakened 0.96 percent to 50.67 to the dollar. Bitcoin recovered 1.21 percent to 62,825 dollars.

Further west, Monday’s closes from our previous wrap remain the reference: the S&P 500 fell 0.79 percent to 7,515.34, the Nasdaq 1.55 percent to 25,873.18 and the Dow 0.26 percent to 52,498.64, while Europe finished flat to higher, the CAC 40 up 0.31 percent at 8,364.65. US equity futures were near flat before the inflation print.

Why it matters: Two days into the blockade escalation, the market map is settling into a pattern: equities near the strait barely move, Asia trades the chip cycle, and the real economic transmission shows up in physical flows, with China’s crude imports down 41.3 percent while Brent presses 87 dollars. For Gulf exporters that is the uncomfortable pairing this crisis keeps producing, higher prices on lower volumes to the biggest customer. Today’s US inflation print and Chair Warsh’s first testimony, hours away, decide whether the oil move starts feeding the policy path.

Outlook: The next markers: June CPI at 12:30 UTC with Warsh before the House at 14:00 UTC and the big US banks reporting through the evening, then China’s second-quarter GDP early Wednesday alongside US PPI and the Senate leg of the testimony, with the Bank of Korea deciding Thursday. Qatar’s exchange returns Sunday.

Table – MENA and Asia equities, 14 July close, ranked by change:

Table – US and Europe, Monday 13 July closes, for reference, ranked by change:

Table – Commodities, rates, volatility, FX and crypto, intraday 14 July:

Price basis: exchange closing data and CNBC intraday quotes, 14 July; commodity figures are intraday quotes, not settlements.

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; General Administration of Customs of China; CNBC; Bloomberg.

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