Egypt's bourse tumbled on Thursday after clashes between political parties killed five, spooking regional investors, while other Gulf markets were lacklustre. Opponents of President Mohamed Morsi and his Islamist supporters clashed on Wednesday night and early Thursday morning during rival demonstrations sparked by Morsi's decision last month to expand his powers.
Egypt's military deployed around the presidential palace and ordered demonstrators to evacuate the area. Worsening political turmoil spooked Arab investors, who were net sellers on the bourse against Egyptian buyers, exchange data showed. Non-Egyptians have previously been net buyers amid the turmoil.
"(The current level) represents a very good entry opportunity for medium-term players but not the retail," said Safa Ghabbour, assistant fund manager at Misr Capital Investments in Cairo. Many shares were temporarily suspended intraday after they lost their maximum allowed limit during a session. Cairo's benchmark fell 4.6 percent, taking losses to 11 percent since Morsi awarded himself extraordinary powers in a decree on November 22.
Commercial International Bank and Orascom Construction Industries were the main drag, losing 5.1 and 3.4 percent respectively. El Sewedy Electric dropped 6.6 percent. All except seven shares fell on the main 30-stock index. In Oman, the index gained 0.7 percent, rising to a three-week high as financial stocks attracted fresh buying.
Al Izz Islamic Bank jumped 4.8 percent, up for a third session after being listed on Monday. Bank Muscat rose 0.2 percent, Oman Investment and Finance Co climbed 1.1 percent. Bank Sohar added 0.6 percent. Trading volumes surged on Muscat's bourse on Wednesday to 71.6 million shares, the highest one-day amount since June 2009, as a government fund, Investment Stabilisation Fund, resumed activity to boost the market's momentum, Nasr said.
In Kuwait, the index ticked up 0.07 percent, snapping two sessions of heavy losses. "The market was very sluggish today with thin trading on stocks like NBK and Zain," said a Kuwait-based trader who asked not to be identified. Violent street protests extended for a third night in Kuwait on Wednesday, part of a wave triggered by changes to voting rules the opposition said were designed to skew elections in favour of pro-government candidates.
Elsewhere, Dubai's measure eased 0.07 percent in thin trade amid a lack of local catalysts. The market is still up 18.9 percent year-to-date. Investors lack a catalyst to spur activity as tension in Egypt keeps caution intact. "Regional markets are expected to remain range bound in the near future amid political unrest in the region and mixed news from international markets," Al Masah Capital said in a note.
Abu Dhabi clipped 0.1 percent off its benchmark but is holding on to 11.3 percent year-to-date gains. Elsewhere, Qatar's index gained 0.3 percent, up for a second session since Monday's four-month low, while volumes dropped to a 15-week nadir. Investors have a muted outlook on the market with little local drivers to attract buying. Only 1.48 million shares are traded on the exchange.
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