Stock market dips 4% amid Syria fears

Egypt’s stock market marked a four-percent decline on Thursday by end of trading, amid expectations of a potential military strike against Syria. The benchmark EGX30 meanwhile rose by 0.8 percent, recording 5,267 points.

EGX70, which tracks small and medium-sized shares, increased by 1.36 percent, recording 441.4 points. The broader EGX100 increased by 1.2 percent reaching 746.9 points.

Trading reached LE230.4 million in total on Thursday. Capital market gained around LE2.3 billion, reaching LE354.7 billion.

The spectre of renewed Muslim Brotherhood demonstrations on Friday, after the group's "anti-coup" alliance announced a campaign of civil disobedience, and widespread speculation of a military strike in Syria may account for the day's trading, analysts said.

Mohamed Fathallah, bank chairman, said the situation on international and Arab markets will become clearer after final decision on Syria is made.

The situation, with fluctuations in stock market indices, was similar to the period before the U.S. attacked Iraq in 2003.

Fathallah also stressed that investors would weather the market, despite dangers arising from an increase in interest.

Financial expert Ibrahim al-Nemr said 30 August protests planned by the Muslim Brotherhood may have influence on the markets, but that the markets have quickly absorbed clashes – including violent ones – in the past.

Eissa Fathy from the Egyptian Federation of Chambers of Commerce’s securities division added: “The market will make up for losses this week during future sessions." The situation would also improve as the curfew, introduced as part of Egypt's renewed state of emergency, was relaxed.

“As the political situation gets better and becomes more stable, the economic situation will improve, which will positively reflect on the capital market,” he added.

Edited translation from Al-Masry Al-Youm

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