Market Wrap Asia 7 August: Shenzhen Gains 1.4 Percent as Gold Jumps Before Jobs Data

By The Edge Research Team

Asian markets ended the week mixed on Friday, with mainland China leading the gainers while selling pressure in South Korea eased after Thursday’s sharp pullback, as gold surged ahead of the day’s US jobs report and oil held its recovery. China’s Shenzhen Component rose 1.42 percent and the Shanghai Composite 1.02 percent, per CNBC, while gold jumped 1.93 percent to 4,382.70 dollars an ounce, a fresh push higher hours before the July employment data. In the Gulf, where only the United Arab Emirates traded, Dubai rose while Abu Dhabi drifted.

Across Asia the session tilted higher outside the technology heavyweights. China’s Shenzhen Component gained 1.42 percent to 14,311.01 and the Shanghai Composite added 1.02 percent to 3,940.04, while Singapore’s Straits Times rose 1.05 percent, Hong Kong’s Hang Seng 0.54 percent and Japan’s Topix 0.47 percent, per CNBC. South Korea’s Kospi eased 0.60 percent, a far milder decline after Thursday’s 4.58 percent drop, while the Nikkei 225 slipped 0.12 percent, India’s Nifty 50 fell 0.27 percent, Taiwan’s Taiex 0.38 percent and Australia’s ASX 200 was little changed.

In the Gulf, only the United Arab Emirates traded on Friday. Dubai’s DFM General Index rose 0.45 percent to 5,944.50, per the exchange and our calculation, recovering part of Thursday’s decline, while Abu Dhabi’s FADGI eased 0.26 percent to 10,094.67, per the exchange.

In commodities, gold surged again while oil consolidated. Gold jumped 1.93 percent to 4,382.70 dollars an ounce, per CNBC, resuming its advance ahead of the jobs report after Thursday’s pause, while Brent crude eased 0.80 percent to 81.83 dollars a barrel and West Texas Intermediate 0.76 percent to 76.70 dollars, holding most of Thursday’s recovery.

In currencies and crypto, the dollar was steady. The euro held at 1.1531 and sterling at 1.3443, while the yen was little changed at 158.33 per dollar, per CNBC. The Egyptian pound held near 49.73 per dollar, while Bitcoin rose 0.95 percent to about 64,989 dollars and the US 10-year Treasury yield edged down to 4.656 percent.

For reference, Thursday’s closes from our US-Europe wrap showed Wall Street pausing ahead of the jobs report, with the Dow down 0.85 percent, the S&P 500 down 0.18 percent and the Nasdaq Composite near flat, while Europe closed mostly higher led by the Euro Stoxx 50, per CNBC.

Why it matters: Friday’s session is the quiet before the data, our reading. China’s advance and the sharp moderation in Korea’s selling suggest the week’s technology turbulence is settling rather than spreading, and gold’s fresh surge toward 4,400 dollars shows investors adding protection into the jobs print rather than abandoning the rally. For the Gulf, which sits closed until Sunday apart from the UAE, the setup is unusually clean: oil has recovered to the low 80s on Brent, and the jobs report at 3:30 PM Kuwait time will have fully settled into Treasury yields, the dollar and global risk appetite by Sunday’s regional open, the channels through which the data reaches regional markets. Friday’s UAE session fit the pattern, with Dubai recovering part of Thursday’s dip while Abu Dhabi drifted.

Outlook: Today’s July US jobs report at 8:30 AM Eastern Time, 3:30 PM Kuwait time, is the week’s decisive release, our reading. A moderately soft print would pull yields lower, extend gold’s run and support risk appetite into next week, while a strong one would firm the dollar and test the week’s metals surge. A very weak reading, though, could cut the other way by stirring worries about US growth rather than lifting risk assets. We will cover the report and the market reaction in a separate article this evening once the data and the first sessions of response are in, and Sunday’s regional open prices the full verdict. The other markers are whether Brent consolidates above 80 dollars and whether Korea’s calmer tone holds into Monday.

Table – Asia and UAE equities, 7 August close, ranked by change:

Table – US and Europe, 6 August close, for reference, ranked by change:

Table – Commodities, intraday 7 August, ranked by change:

Table – Currencies and crypto, intraday 7 August, ranked by percent change:

Sources: CNBC; the regional exchanges.

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