Market Wrap MENA-Asia 19 August: Kospi Plunges 5.8 Percent, Kuwait Rises, Egypt Slides

By The Edge Research Team

Asia’s selloff turned into a rout on Wednesday, led by the chip complex, while the Gulf split and Kuwait advanced, per CNBC. South Korea’s Kospi plunged 5.80 percent in a fall that led to a temporary halt in trading at the open, per CNBC, Japan’s Nikkei 225 sank 3.16 percent and the Shenzhen Component lost 5.01 percent, while Boursa Kuwait’s All-Share rose 0.54 percent to lead the Gulf and Saudi Arabia’s TASI edged up 0.13 percent. Egypt’s EGX 30 fell 1.38 percent in its third straight decline as the pound’s official rate weakened for a second day.

Across Asia, the selling concentrated where the year’s gains have been. South Korea’s Kospi closed at 6,471.17, down 5.80 percent, after opening 5.89 percent lower, a drop that led to a temporary halt in trading, per CNBC, with the index’s heavyweights Samsung Electronics and SK Hynix falling 7.82 and 9.75 percent, per CNBC’s closing report. SK Hynix said Wednesday it would spend at least half of its free cash flow from 2025 to 2027 on shareholder returns, including buying back and cancelling 40 trillion won, or about 28.6 billion dollars, of treasury shares, per CNBC. Japan’s Nikkei 225 closed at 65,326.42, down 3.16 percent, and the broader Topix at 4,012.31, down 3.09 percent, with SoftBank Group falling more than 10 percent, per CNBC. China’s mainland boards fell hard: the Shenzhen Component dropped 5.01 percent to 13,890.15, the CSI 300 2.90 percent to 4,588.70 and the Shanghai Composite 2.40 percent to 3,894.42, per CNBC, even as robot maker Unitree Robotics surged as much as 629 percent on its Shanghai debut after raising about 6.1 billion yuan, roughly 905 million dollars, per CNBC. Hong Kong’s Hang Seng was the region’s exception, closing effectively flat at 25,495.07, up 0.09 percent, per CNBC. Taiwan’s Weighted Index fell 1.30 percent to 44,719.35, India’s Nifty 50 0.32 percent to 24,078.30, Singapore’s Straits Times 0.13 percent to 5,694.24 and Australia’s S&P/ASX 200 0.18 percent to 9,053.80, per CNBC.

In the Gulf, the region held up far better than Asia, and Kuwait led it. Boursa Kuwait’s All-Share rose 0.54 percent to 8,821.28, with the Premier Market up 0.40 percent at 9,247.80 and the Main Market up 1.20 percent, per the exchange, the strongest session in the Gulf. Saudi Arabia’s TASI added 0.13 percent to 10,925.69 after the closing auction, with 123 gainers against 130 decliners, the MSCI Tadawul 30 up 0.06 percent at 1,468.39 and Nomu down 0.05 percent at 21,573.18, per the Saudi Exchange. Jordan’s ASE General rose 0.31 percent to 4,002.91, crossing the 4,000 mark, per the exchange. Muscat’s MSX 30 was little changed at 7,546.51, down 0.04 percent, with 23 gainers against 22 decliners on 49.1 million rials of turnover, and Bahrain’s All Share eased 0.08 percent to 1,945.26, per the exchanges. The declines sat on the other side of the map: Dubai’s DFM General fell 0.28 percent to 5,841.85 on 188.2 million shares and 598.9 million dirhams of value, Qatar’s QE Index dropped 0.76 percent to 9,772.85 in a third straight decline, our calculation against Tuesday’s close, and Abu Dhabi’s FADGI fell 0.91 percent to 10,006.17, ending two days of gains, per the exchange.

Egypt caught the global downdraft. The EGX 30 fell 1.38 percent to 54,512.65, its third consecutive decline, after touching a session low of 54,381.50, leaving the close 1,342.09 points, or 2.40 percent, below the record close of 55,854.74, our calculation, with the year-to-date gain at 30.32 percent, per the exchange. The pound weakened for a second day: the Central Bank of Egypt’s official rate for 19 August is 50.6483 buy and 50.7877 sell per dollar, about 0.40 percent weaker than Tuesday, our calculation, taking the two-day depreciation to about 1.0 percent.

The geopolitical backdrop stayed unresolved. President Donald Trump said Tuesday that no talks were underway with Iran and that none were planned, while maintaining that the Strait of Hormuz was open, at odds with Tehran’s claim that the route remained closed, per CNBC. Oil held its bid on the conflicting signals: ICE Brent for October traded at 91.54 dollars a barrel, up 0.57 percent, and WTI for September at 85.53 dollars, up 0.69 percent, in a snapshot captured around 12:10 GMT, 3:10 pm Kuwait time, per CNBC, with COMEX gold for December little changed at 4,419.20 dollars an ounce, down 0.03 percent.

In currencies and crypto, the dollar softened as the yen firmed. The euro rose 0.26 percent to 1.1604 and sterling 0.18 percent to 1.3553, while the yen strengthened 0.33 percent to 159.10 per dollar and the dollar index eased 0.25 percent to 99.409, per CNBC, with the Kuwaiti dinar at 0.3071. Bitcoin was little changed at 64,450.88 dollars, down 0.24 percent, per CNBC. The Cboe Volatility Index closed Tuesday at 15.84, up 4.28 percent, per Cboe, with the US session yet to open on Wednesday.

For reference, Tuesday’s closes from our 18 August wrap show Wall Street lower for a third straight session with the Nasdaq down 1.33 percent, Europe mostly lower with London the exception, and the official Treasury curve easing at the long end. Wall Street was yet to open on Wednesday at the time of writing, so Tuesday’s closes are carried below strictly for reference.

MENA equities, 19 August close, ranked by change

Asia equities, 19 August close, ranked by change

US equities, Tuesday 18 August closes, for reference, ranked by change

Europe equities, Tuesday 18 August closes, for reference, ranked by change

Commodities, intraday 19 August, ranked by change

Currencies, 19 August

US Treasury yields, Tuesday 18 August official curve, for reference, ranked by change

Volatility and crypto

Why it matters: Wednesday sorted the world’s markets by their exposure to one trade, our reading. The selling that hit US chipmakers on Tuesday, as covered in our US-Europe wrap, landed with full force where semiconductor weight is heaviest, in Seoul, Tokyo and Shenzhen, and the size of the moves, a 5.80 percent fall that briefly halted trading in Seoul at the open, says positioning was crowded rather than that news was new. The Gulf’s resilience is the other half of the story: Kuwait rose across all its indices, Saudi Arabia closed higher, and the Gulf’s declines were measured in fractions rather than percentage points, because the chip trade simply is not the Gulf’s trade and oil above 91 dollars supports the exporters’ revenue outlook, though the price helps only to the extent cargoes keep moving, which keeps the strait the region’s own watch item. Egypt stands out on the day: its 1.38 percent decline was the region’s deepest and its third in a row, and it arrived with a second day of currency weakness, which reads less like profit-taking at a record and more like a position adjustment running through both markets at once, though the index remains up 30.32 percent for the year even after the pullback.

Outlook: The next sessions test whether the chip unwind has run its course or broadens, our reading. The markers are whether Seoul stabilises after Wednesday’s fall and SK Hynix’s buyback pledge, whether Wall Street’s reopening extends its three-session decline into the chip complex again, whether Brent holds the 91 dollar area on the conflicting signals over the strait, and for Egypt whether the EGX 30 finds support above Wednesday’s low of 54,381.50 and the pound’s official rate steadies after a two-day slide of about 1 percent.

Sources: CNBC; Cboe; the Saudi Exchange; Boursa Kuwait; Dubai Financial Market; Abu Dhabi Securities Exchange; Muscat Stock Exchange; Bahrain Bourse; Amman Stock Exchange; the Egyptian Exchange; Central Bank of Egypt.

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