Market Wrap MENA-Asia 12 August: Kospi Surges 3.7 Percent While Gulf Firms

By The Edge Research Team

Asian equities carried the session on Wednesday, led by a 3.68 percent surge in South Korea’s Kospi, while Gulf bourses closed mostly firmer and Egypt extended its advance. Hong Kong was the clear laggard.

The Kospi closed at 6,579.04, up 3.68 percent and the largest move among the 20 benchmarks in the table below, per CNBC. Taiwan’s weighted index rose 0.88 percent to 45,518.07. In Japan the Topix added 0.94 percent to 4,139.00 and the Nikkei 225 rose 0.83 percent to 67,524.06. Mainland China advanced on both boards, with the Shenzhen Component up 1.09 percent at 14,414.43 and the Shanghai Composite up 0.32 percent at 3,946.68. Against that, the Hang Seng fell 0.83 percent to 25,440.17, Singapore’s Straits Times lost 0.58 percent to 5,720.75, Australia’s ASX 200 fell 0.45 percent to 9,209.40 and India’s Nifty 50 eased 0.15 percent to 24,435.95.

Oil was higher at the time of writing but gold led. Brent crude traded at US$89.08 a barrel, up 0.19 percent, and West Texas Intermediate at US$83.57, up 0.44 percent, per CNBC. Gold for December delivery on the COMEX exchange was quoted at US$4,489.20 an ounce, up 1.08 percent and the largest move of any instrument tracked here, while the CBOE volatility index eased 1.11 percent to 15.11. These are intraday quotes rather than settlement prices.

Gulf markets were narrowly higher almost across the board. Dubai’s DFM General Index led at 5,920.39, up 0.69 percent, per the exchange. Kuwait’s All-Share closed at 8,860.63, up 0.28 percent, with the Premier Market at 9,313.45, up 0.27 percent, per Boursa Kuwait. Oman’s MSX 30 added 0.20 percent to 7,481.70, Saudi Arabia’s TASI edged up 0.10 percent to 10,844.12, and Abu Dhabi’s FTSE ADX General Index gained 0.05 percent to 10,012.93, per the exchanges and our calculation. The exceptions were Bahrain, whose All Share index slipped 0.20 percent to 1,951.62, and Jordan, where the ASE index fell 0.48 percent to 3,971.61, per the exchange and our calculation.

Egypt and Qatar both advanced. The EGX30 closed at 55,039.76, up 0.38 percent, having opened at 54,829.32, and is now up 31.58 percent for the year, per the Egyptian Exchange. Qatar’s QE Index rose 0.37 percent to 10,055.60, per the exchange and our calculation.

The dollar was softer. The euro firmed 0.14 percent to US$1.1556 and sterling 0.21 percent to US$1.3533. The dollar eased 0.21 percent against the yen to 158.94. The Kuwaiti dinar was steady, with the dollar at 0.3072 dinars. The Egyptian pound held just above 50 to the dollar at 50.17, having crossed that level this week. Bitcoin rose 0.99 percent to US$63,984.11. The US 10-year Treasury yield fell 2.2 basis points to 4.662 percent, per CNBC.

Tuesday’s closes from our previous wrap remain the last full prints for the United States and Europe. Wall Street ended lower before the inflation reading, with the S&P 500 down 0.32 percent at 7,728.20, the Dow Jones down 0.34 percent at 53,791.85 and the Nasdaq Composite down 0.60 percent at 26,445.45. In Europe the DAX rose 0.26 percent and the Euro Stoxx 50 0.24 percent, while the CAC 40 fell 0.13 percent and the FTSE 100 0.17 percent. In the European session under way as this was written the DAX was up 0.49 percent, the Euro Stoxx 50 up 0.23 percent and the FTSE 100 up 0.03 percent, while the CAC 40 was down 0.17 percent. US futures pointed higher, with S&P 500 futures up 0.48 percent, Dow futures up 0.30 percent and Nasdaq 100 futures up 1.01 percent, per CNBC.

Table – MENA and Asia equities, 12 August close, ranked by change:

Table – US and Europe, Tuesday 11 August closes, for reference, ranked by change:

Table – Commodities, rates, volatility, FX and crypto, intraday 12 August:

Why it matters: The session’s defining feature was dispersion, not a synchronised move. The Kospi gained 3.68 percent while the median absolute move across the 20 benchmarks in the table was 0.42 percent, our calculation, and the two largest declines, Hong Kong at 0.83 percent and Singapore at 0.58 percent, sat in the same broad region as the largest gain. That points to market-specific drivers rather than a single regional signal. The cross-asset picture points the same way: gold rose 1.08 percent and both oil benchmarks were higher, yet the US 10-year Treasury yield fell 2.2 basis points and the VIX eased 1.11 percent to 15.11. Rising gold alongside falling implied volatility and a lower yield is not the combination a market produces when it is repricing risk upward. The VIX measures implied volatility on the S&P 500 rather than on any market in this wrap, so it is context rather than proof.

Outlook: The immediate marker is whether the Kospi holds a meaningful share of Wednesday’s 3.68 percent gain on Thursday. Across the Gulf, Dubai, Kuwait, Oman, Saudi Arabia, Abu Dhabi and Qatar all finished higher, but every gain outside Dubai was below 0.4 percent, leaving breadth positive and shallow. The next test is how the US inflation reading feeds into Thursday’s Gulf session, the region’s last before the weekend. Egypt’s EGX30 is up 31.58 percent for the year with the pound at 50.17 to the dollar, and those two lines are worth watching together. US futures were higher at the snapshot used here; if that carries into the cash session it would set a firmer cue for Thursday’s Asian open.

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

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