Market Wrap MENA and Asia 27 July: Markets Rebound as Brent Slides Below 91 Dollars
Gulf and Asian equity markets advanced on Monday, rebounding after Friday’s technology-driven selloff, as a pause in US-Iran hostilities pulled the war-risk premium out of oil and lifted global risk appetite, per CNBC. Brent crude slid more than 6 percent to below 91 dollars a barrel. Dubai and Qatar led the regional gains, while mainland China, South Korea and Australia paced a broad Asian recovery, our reading.
Across the region, Dubai’s DFM General led with a 0.99 percent gain to 5,844.07 and Qatar’s QE Index rose 0.82 percent to 10,085.39, our calculation against its 26 July close of 10,003.67. Boursa Kuwait advanced, its Premier Market up 0.65 percent to 9,183.74 and the All Share 0.50 percent to 8,740.60. Egypt’s EGX30 added 0.40 percent to 53,633.92 and Jordan’s ASE 0.39 percent to 3,954.73. Oman’s MSX 30 rose 0.28 percent to 7,185.38 and Abu Dhabi’s FADGI 0.17 percent to 9,845.11. Saudi Arabia’s TASI was little changed, up 0.02 percent to 10,769.12, with the MSCI Tadawul 30 easing 0.11 percent to 1,442.21, while Bahrain’s All Share was effectively flat, off 0.02 percent to 1,965.46. In the currency market, the Egyptian pound firmed to 50.68 per dollar from 51.26, and the Kuwaiti dinar held near 0.3078.
In Asia, the rebound was broad. South Korea’s Kosdaq jumped 2.22 percent and the Kospi 0.97 percent, recovering part of Friday’s steep chip-driven fall, while mainland China’s Shenzhen Component rose 2.72 percent and the Shanghai Composite 1.15 percent, per CNBC. Australia’s ASX 200 gained 1.39 percent, Japan’s Topix 1.37 percent and the Nikkei 225 0.50 percent, Hong Kong’s Hang Seng 0.98 percent, India’s Nifty 50 0.96 percent and Singapore’s Straits Times 0.57 percent. Taiwan’s Taiex was the lone laggard, effectively flat and off 0.05 percent.
The standout move came in oil, which extended the retreat that began late last week. Brent crude fell 6.62 percent to 90.37 dollars a barrel and West Texas Intermediate 5.86 percent to 84.08 dollars. The slide followed a pause in US-Iran hostilities, with Iran reportedly saying it would halt attacks as long as the United States refrains from striking, easing nearly two weeks of conflict and trimming the war-risk premium, per CNBC. Oil exports through the Strait of Hormuz remained constrained, however, leaving the retreat concentrated in the geopolitical premium rather than any resolution of the physical supply disruption, our reading. Gold firmed 0.46 percent to about 4,090 dollars an ounce and silver 0.47 percent, while the US dollar index was little changed and the 10-year Treasury yield eased to 4.647 percent.
Why it matters: The session marked a broad equity rebound alongside a de-escalation in regional tensions, our reading, with the boards tracking Asia higher as last week’s technology-led anxiety eased, though the advance was uneven: Saudi Arabia’s oil-heavy benchmark was little changed as the slide in crude offset the firmer global tone, our reading. The sharp drop in oil is a double-edged signal for the Gulf, trimming the near-term export-revenue tailwind for producers while pointing to lower security risk around regional shipping if the reported diplomatic track holds, our reading. For Egypt, the firmer pound alongside a higher equity market was a modestly supportive combination.
Outlook: The week’s markers are the Federal Reserve’s decision on Wednesday, the first reading on second-quarter US growth and the June inflation gauge on Thursday, and a heavy slate of US technology earnings, alongside whether Brent stabilizes after Monday’s slide or the war premium rebuilds. Regional markets trade on through Thursday and will take their cue from the oil price and the global technology tone.
MENA markets, 27 July close, ranked by change
| Market | Close | Change |
|---|---|---|
| DFM General (Dubai) | 5,844.07 | +0.99% |
| QE Index (Qatar) | 10,085.39 | +0.82% |
| Premier Market (Kuwait) | 9,183.74 | +0.65% |
| All Share (Kuwait) | 8,740.60 | +0.50% |
| EGX30 (Egypt) | 53,633.92 | +0.40% |
| ASE (Jordan) | 3,954.73 | +0.39% |
| MSX 30 (Oman) | 7,185.38 | +0.28% |
| FADGI (Abu Dhabi) | 9,845.11 | +0.17% |
| TASI (Saudi Arabia) | 10,769.12 | +0.02% |
| All Share (Bahrain) | 1,965.46 | -0.02% |
| MSCI Tadawul 30 (Saudi Arabia) | 1,442.21 | -0.11% |
Asia, 27 July close, ranked by change
| Market | Close | Change |
|---|---|---|
| Shenzhen Component (China) | 14,148.73 | +2.72% |
| Kosdaq (South Korea) | 764.86 | +2.22% |
| ASX 200 (Australia) | 8,894.00 | +1.39% |
| Topix (Japan) | 4,066.07 | +1.37% |
| Shanghai Composite (China) | 3,858.25 | +1.15% |
| Hang Seng (Hong Kong) | 25,207.18 | +0.98% |
| Kospi (South Korea) | 6,755.75 | +0.97% |
| Nifty 50 (India) | 23,995.95 | +0.96% |
| Straits Times (Singapore) | 5,620.24 | +0.57% |
| Nikkei 225 (Japan) | 64,931.19 | +0.50% |
| Taiex (Taiwan) | 43,634.19 | -0.05% |
Commodities, rates, FX and crypto (live intraday at roughly 3:40 pm Kuwait time, front-month futures), ranked by change
| Instrument | Level | Change |
|---|---|---|
| Copper | $6.392/lb | +0.53% |
| Silver | $59.18/oz | +0.47% |
| Gold | $4,089.70/oz | +0.46% |
| Bitcoin | $64,915 | +0.42% |
| EUR/USD | 1.1379 | +0.11% |
| USD/KWD | 0.3078 | -0.05% |
| US Dollar Index | 101.417 | -0.05% |
| USD/JPY | 163.67 | -0.10% |
| GBP/USD | 1.3305 | -0.11% |
| US 10-year Treasury yield | 4.647% | -3.2 bp |
| USD/EGP | 50.68 | -1.13% |
| Natural gas | $2.764/mmBtu | -3.73% |
| WTI crude | $84.08 | -5.86% |
| Brent crude | $90.37 | -6.62% |
Price basis: the MENA and Asia tables are Monday 27 July closes; the MENA figures are pulled at the exchange originators after the close, with the Qatar change our calculation against its 26 July close of 10,003.67; the Asia figures are from CNBC; the commodity, rate, FX and crypto levels are from CNBC and were live intraday at roughly 3:40 pm Kuwait time, with Europe still trading and the United States not yet open; USD/EGP and USD/KWD are Monday 27 July levels; oil and metals are front-month futures.
Sources: Saudi Exchange; Boursa Kuwait; Qatar Stock Exchange; Amman Stock Exchange; Abu Dhabi Securities Exchange; and CNBC.
