Market Wrap MENA-Asia 15 July: Gulf Barely Moves Through Fresh Hormuz Strikes and Cairo Adds 0.5 Percent as Seoul Surges 6.2 Percent and China Slows to 4.3 Percent

By The Edge Research Team

Asia set the pace on Wednesday and the Gulf answered with its calmest session since the escalation began. Seoul’s Kospi surged 6.24 percent to 7,284.41 in a sharp extension of its rebound, Hong Kong rose 1.40 percent and Tokyo 1.49 percent even as China reported its weakest quarterly growth in more than three years, while a fresh wave of US strikes near the Strait of Hormuz, launched during Gulf trading hours, left the region’s equities almost unmoved: every Gulf index closed within half a percent of flat, our calculation, with TASI down 0.10 percent and Dubai up 0.35 percent. Cairo extended its recovery, the EGX30 adding 0.50 percent, and Brent held near 85 dollars.

The Asian board was a chip-cycle story with a Chinese asterisk. The Kospi’s 6.24 percent jump to 7,284.41 stacks a two-day rebound of 7.0 percent on top of Tuesday’s recovery, our calculation, though the index remains about 2.6 percent below its close before Monday’s 8.95 percent crash, also our calculation from the session record. The Nikkei 225 rose 1.49 percent to 68,751.51 and the Topix 1.22 percent to 4,088.12, Hong Kong’s Hang Seng added 1.40 percent to 24,681.10, Singapore’s Straits Times Index 1.17 percent to 5,559.72 and Australia’s ASX 200 0.37 percent to 8,841.10, while India’s Nifty 50 closed near flat at 24,078.50. The mainland went the other way, Shanghai easing 0.29 percent to 3,955.58 and Shenzhen’s component index 0.97 percent to 14,779.40.

Beijing gave the divergence its reason. China’s economy grew 4.3 percent in the second quarter, the weakest pace since the fourth quarter of 2022, missing the 4.5 percent consensus in a Reuters poll and slowing from 5.0 percent in the first quarter, per the National Bureau of Statistics release carried by CNBC, a print that sits below the government’s own 4.5 to 5.0 percent full-year target range, though first-half growth of 4.7 percent remains inside it, per the statistics bureau’s own release. Fixed-asset investment excluding rural households fell 5.7 percent in the first half, a bigger decline than expected, while June carried the offsetting signal: industrial output accelerated to 5.3 percent year on year, 0.8 percentage points faster than May, and retail sales returned to 1.0 percent growth from May’s 0.6 percent contraction, per the National Bureau of Statistics. Stacked on Tuesday’s customs data showing crude imports down 41.3 percent in June, covered in our previous wrap, the growth miss hardens the demand-side question hanging over the oil rally, our reading.

Oil barely blinked at the day’s escalation. US Central Command said it launched a fresh wave of strikes from 13:00 Kuwait time against coastal defense systems and cruise missile storage and launch sites near the strait, saying the strikes were designed to degrade capabilities used against commercial shipping in the Strait of Hormuz, per CNBC, hours after President Trump warned the campaign would intensify. Brent traded at 85.19 dollars, up 0.54 percent from Tuesday’s 84.73 dollar settlement, and WTI at 79.76, up 0.53 percent, while gold eased 0.56 percent to 4,047.00 dollars and the VIX eased 0.48 percent to 16.42. A market that repriced the blockade by twelve percent on Monday treated Wednesday’s strikes as already in the price, our reading of the session.

The Gulf’s fourth session since the escalation was its quietest. TASI slipped 0.10 percent to 10,704.51 with the MSCI Tadawul 30 off 0.05 percent at 1,424.07, Boursa Kuwait’s All Share Index eased 0.10 percent to 8,649.94 and the Premier Market Index 0.13 percent to 9,067.15, and Abu Dhabi’s FADGI lost 0.21 percent to 9,831.46. Dubai broke the drift, the DFM General Index rising 0.35 percent to 5,911.36 to reclaim part of two days of declines, while Bahrain’s All Share slipped 0.13 percent to 1,987.52, Muscat’s MSX 30 fell 0.41 percent to 7,571.40, our calculation from the exchange’s level and point change on a confirmed closing print after Tuesday’s pre-closing figure, and Amman’s ASE index eased 0.26 percent to 3,902.46, our calculation from the exchange’s prints. The Qatar Stock Exchange remains suspended and resumes on Sunday, 19 July.

Cairo kept its own rhythm. The EGX30 rose 0.50 percent to 52,558.39, recovering most of Tuesday’s dip after touching 52,695 during the session, per the exchange’s prints, leaving the index up 25.65 percent for the year.

In currencies and crypto, the board was quiet: the euro eased 0.10 percent to 1.1408 and sterling firmed 0.12 percent to 1.3405, the yen slipped 0.09 percent to 162.38 per dollar, the Kuwaiti dinar held at 0.3076, and the Egyptian pound firmed 0.28 percent to 50.53 to the dollar after two days of weakening. Bitcoin was little changed at 64,653 dollars.

Further west, Tuesday’s closes from our US-Europe wrap remain the reference: the Nasdaq rose 0.90 percent to 26,107.01 and the S&P 500 0.38 percent to 7,543.59 on the soft June inflation print, with the Dow held flat by IBM’s 25.21 percent collapse against Goldman’s 9.00 percent surge, while Europe closed flat to higher, the FTSE 100 up 0.30 percent. US equity futures were near flat ahead of Chair Warsh’s Senate testimony. After the regional data cutoff, June US producer prices added a second disinflationary print to the week: the final demand index fell 0.3 percent on the month, with goods prices down 1.4 percent in their largest decline since July 2022 while services rose 0.2 percent, leaving annual producer inflation at 5.5 percent, per the Bureau of Labor Statistics.

Why it matters: Four sessions into the escalation, the market’s verdict is consistency itself: strikes near the strait now move Gulf equities less than half a percent while the real repricing happens in the macro numbers, China growing 4.3 percent with crude imports down 41.3 percent is a weaker demand floor under an oil price the conflict keeps propping up. For the Gulf, a region trading flat through live strikes at its shipping artery is a statement of resilience, but the pairing of firmer oil and a softer largest customer is the term structure of the same risk.

Outlook: The next markers: the producer-price decline feeds straight into Chair Warsh’s Senate testimony at 17:00 Kuwait time, the Bank of Korea decides Thursday with UK GDP the same morning, and Qatar’s exchange returns Sunday. On the ground, the question is whether the strike campaign stays aimed at military and shipping infrastructure or widens, and whether Beijing answers a 4.3 percent quarter with the stimulus its investment slide is arguing for.

Table – MENA and Asia equities, 15 July close, ranked by change:

Table – US and Europe, Tuesday 14 July closes, for reference, ranked by change:

Table – Commodities, rates, volatility, FX and crypto, intraday 15 July:

Price basis: Gulf and Egypt closes pulled 15:29-15:44 Kuwait time at exchange originators; Asia, oil and FX via CNBC quotes about 12:30 UTC on 15 July; commodity and FX figures are intraday quotes, not settlements. The US producer-price figures were released after this cutoff.

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; National Bureau of Statistics of China; US Bureau of Labor Statistics; CNBC.

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