Market Wrap MENA-Asia 2 July: Chip Rout Hits Asia as Gulf Ends Mixed and Egypt Closes for a Holiday
Asian trading was dominated by a sharp selloff in technology and semiconductor shares on Thursday, while Gulf markets ended mixed to slightly lower and the Egyptian Exchange was closed for a public holiday.
The heaviest move came from South Korea, where the KOSPI plunged 7.89 percent to 7,648.09 as chipmakers sold off after a strong quarter. Japan’s Nikkei 225 dropped 2.47 percent to 68,733.15 and China’s Shanghai Composite fell 2.03 percent to 4,028.90, extending the pressure across Asian technology and industrial benchmarks, as investors also positioned ahead of a US payrolls report brought forward to Thursday because US markets are closed on Friday for the Independence Day holiday. Hong Kong bucked the trend, with the Hang Seng rising 0.76 percent to 23,055.03 as it reopened after the 1 July holiday.
Gulf markets were quieter and more mixed. Abu Dhabi’s FTSE ADX General Index edged up 0.22 percent to 9,809.64 and Oman’s MSX 30 gained 0.19 percent to 7,575.22, while Kuwait’s Premier Market slipped 0.07 percent to 9,092.64, Bahrain’s All-Share fell 0.21 percent to 2,035.66, Saudi Arabia’s TASI eased 0.25 percent to 10,829.82, Dubai’s DFM General declined 0.32 percent to 5,990.59 and Qatar’s QE Index was the regional laggard, down 0.77 percent to 10,211.16. The Egyptian Exchange did not trade, closed for the 30 June Revolution anniversary holiday, and resumes on Sunday 5 July.
The split between Asia and the Gulf was clear in the numbers. The seven Gulf markets in the table posted a simple average decline of about 0.17 percent, with a range of less than one percentage point between Abu Dhabi’s gain and Qatar’s loss. By contrast, the four Asian benchmarks below fell an average of about 2.91 percent, underlining that the day was mainly an Asia technology rotation rather than a broad MENA risk-off session.
In currencies, the dollar was mixed. The yen strengthened to around 161.55 per dollar, while the euro firmed to 1.1400 and sterling to 1.3304. The Egyptian pound held near 49.04 per dollar and the Kuwaiti dinar was stable around 0.3079. Bitcoin rose about 2.1 percent to near 61,240.
For reference, US and European markets closed 1 July mostly lower, with the S&P 500 at 7,483.23, the Nasdaq Composite at 26,040.03 and the Dow Jones Industrial Average at 52,305.24, as technology weakness weighed on Wall Street and Fed Chair Kevin Warsh kept investors focused on inflation and the rate path. The US June payrolls report is due Thursday 2 July at 8:30 a.m. Eastern time, while US equity markets are closed on Friday 3 July for the observed Independence Day holiday.
Why it matters: The Asian selloff was primarily a rotation out of the artificial-intelligence and chip trade after a strong quarter, combined with positioning ahead of a US jobs report that could reshape Federal Reserve expectations. For MENA, the transmission channel is broader than equities: a firmer US rate path would support the dollar and Treasury yields, affecting Gulf liquidity through the dollar pegs and influencing external funding conditions, FX pressure and investor risk appetite across the wider region. The mixed Gulf close therefore looks more like local positioning than a single regional catalyst.
Outlook: Attention now turns to the US June payrolls report, Thursday’s US session, and the OPEC+ meeting on 5 July, which is expected to set August oil output and remains a key swing factor for MENA energy exporters and importers. A firm jobs print would support the dollar and US yields and keep pressure on regional liquidity, while a softer reading would revive rate-cut expectations and ease the external rate backdrop.
MENA & Asia Equities (2 July close)
| Market | Close | % Change |
|---|---|---|
| Hong Kong Hang Seng | 23,055.03 | +0.76% |
| Abu Dhabi FTSE ADX General | 9,809.64 | +0.22% |
| Oman MSX 30 | 7,575.22 | +0.19% |
| Kuwait Premier Market | 9,092.64 | -0.07% |
| Bahrain All-Share | 2,035.66 | -0.21% |
| Saudi Arabia TASI | 10,829.82 | -0.25% |
| Dubai DFM General | 5,990.59 | -0.32% |
| Qatar QE Index | 10,211.16 | -0.77% |
| China Shanghai Composite | 4,028.90 | -2.03% |
| Japan Nikkei 225 | 68,733.15 | -2.47% |
| South Korea KOSPI | 7,648.09 | -7.89% |
Egypt EGX 30: market closed for the 30 June Revolution anniversary holiday (last close 50,532.70 on 1 July); resumes Sunday 5 July.
US & Europe Equities (1 July close, reference)
| Market | Close | % Change |
|---|---|---|
| Germany DAX | 25,040.28 | +0.18% |
| Dow Jones Industrial Average | 52,305.24 | -0.03% |
| UK FTSE 100 | 10,478.34 | -0.18% |
| S&P 500 | 7,483.23 | -0.22% |
| Nasdaq Composite | 26,040.03 | -0.66% |
| Euro Stoxx 50 | 6,282.50 | -0.72% |
| France CAC 40 | 8,337.29 | -0.79% |
Rates, FX & Crypto (intraday 2 July)
| Instrument | Level | Change |
|---|---|---|
| Bitcoin | 61,240 | +2.15% |
| GBP/USD | 1.3304 | +0.25% |
| EUR/USD | 1.1400 | +0.21% |
| USD/KWD | 0.3079 | flat |
| USD/EGP | 49.04 | -0.08% |
| USD/JPY | 161.55 | -0.62% |
Sources: Saudi Exchange; Abu Dhabi Securities Exchange; Boursa Kuwait; Bahrain Bourse; Dubai Financial Market; Muscat Stock Exchange; Qatar Stock Exchange; Egyptian Exchange; CNBC.
