Market Wrap MENA-Asia 6 August: Kospi Drops 4.6 Percent as Oil Rebounds Above 80

By The Edge Research Team

Gulf markets mostly eased on Thursday and Asia turned mixed, led lower by a sharp pullback in South Korea, while oil rebounded above 80 dollars on Brent and gold held near its highs. South Korea’s Kospi dropped 4.58 percent after two days of steep gains, and Dubai’s DFM General Index gave back 1.50 percent after closing above the 6,000 line on Wednesday, per CNBC and the regional exchanges. Brent crude rose 1.93 percent to 80.98 dollars a barrel.

Across Asia the week’s technology rally paused. South Korea’s Kospi fell 4.58 percent to 6,296.38, unwinding part of its surge earlier in the week, while Hong Kong’s Hang Seng eased 1.49 percent, Japan’s Nikkei 225 slipped 0.93 percent and Taiwan’s Taiex 0.48 percent, per CNBC. The gainers were Singapore’s Straits Times, up 1.03 percent, China’s Shanghai Composite, up 0.57 percent, and Australia’s ASX 200, up 0.47 percent, while the Kosdaq added 0.26 percent, the Topix 0.24 percent and India’s Nifty 50 was flat.

In commodities, oil extended its recovery. Brent crude rose 1.93 percent to 80.98 dollars a barrel and West Texas Intermediate 1.49 percent to 76.34 dollars, per CNBC, a second day of stabilisation after the roughly 10 percent two-session drop that followed the OPEC+ decision to raise September output. Gold was little changed at 4,304.70 dollars an ounce after two days of sharp gains.

Gulf markets mostly eased in a quiet retreat. Dubai’s DFM General Index fell 1.50 percent to 5,917.96, stepping back below the 6,000 mark, and Saudi Arabia’s Tadawul All Share Index slipped 0.70 percent to 10,811.57 with the MSCI Tadawul 30 down 0.54 percent, per the exchanges. Qatar’s QE Index eased 0.68 percent to 10,112.25, per the Qatar Stock Exchange and our calculation, Kuwait’s Premier Market slipped 0.25 percent with the All Share down 0.13 percent, and Bahrain’s All Share edged down 0.10 percent. The exceptions were Oman’s MSX 30, up 0.26 percent to 7,367.94, and Abu Dhabi’s FADGI, up 0.09 percent to 10,120.61.

In Egypt, the EGX 30 was effectively flat at 54,676.86, holding the week’s gains after touching an intraday high above 55,000.

In currencies and crypto, the dollar was steady to firmer. The yen eased to 157.89 per dollar, while the euro slipped to 1.1538 and sterling was little changed at 1.3467, per CNBC. The Egyptian pound held at 49.70 per dollar, below the 50 line for a second day, while Bitcoin eased 1.07 percent to about 64,159 dollars.

For reference, Wednesday’s closes from our US-Europe wrap showed Wall Street pausing after two strong days, with the Dow up 0.49 percent, the S&P 500 down 0.17 percent and the Nasdaq Composite down 0.83 percent, while Europe closed mixed, per CNBC.

Why it matters: Thursday’s pullback reads as consolidation rather than reversal, our reading. The Gulf’s retreat was shallow and orderly after Wednesday’s across-the-board advance, with Dubai’s dip following its strongest run in months and Oman and Abu Dhabi still closing higher. The sharper move was in South Korea, where the Kospi unwound part of an exceptional week, a reminder that the technology-led leg of the global rally remains volatile in both directions. For the region, the more consequential development is oil’s second day of recovery: Brent back above 80 dollars eases the pressure on the revenue outlook for Saudi Arabia, Kuwait, the UAE and Oman that the post-OPEC+ slide had created, while gold holding above 4,300 dollars preserves this week’s gains in the value of regional central banks’ reserves. The Egyptian pound holding below 50 for a second day extends Egypt’s run of favourable external signals.

Outlook: Everything now waits on Friday’s July US jobs report, our reading. It lands at 3:30 PM Kuwait time on Friday, after the Gulf’s trading week ends, so the region will price its reaction on Sunday, and the report will set the tone for yields, the dollar, gold and risk appetite into next week. The other markers are whether oil’s recovery holds above 80 dollars on Brent and whether South Korea’s pullback stabilises or deepens. A soft jobs print would extend the falling-yield backdrop that has supported both the metals and regional financing conditions, while a strong one would test the week’s moves across the board.

Table MENA and Asia equities, 6 August close, ranked by change:

Table US and Europe, 5 August close, for reference, ranked by change:

Table Commodities, intraday 6 August, ranked by change:

Table Currencies and crypto, intraday 6 August, ranked by percent change:

Sources: CNBC; the regional exchanges.

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