Following global markets, Egyptian stocks fell on Tuesday for the third day in a row, traders said. World stocks edged down from the previous day's one-month high, while the euro fell broadly as renewed concerns about Europe's banking sector encouraged investors to pause after a recent rally. The North African country's benchmark index EGX 30 shed 69.6 points, or 1.07 per cent, to 6,447.69 points. The EGX 70 index, which measures 70 of the country's small and mid caps, fell by 0.48 per cent 596.98 points. Non-Arabs made net sell-offs worth LE51.6 million ($9.1 million). Local and Arab investors made net purchases worth LE38 million and LE13.5 million respectively, according to the Egyptian Exchange. Orascom Construction Industries, Egypt's largest builder by market value, dipped by 1.61 per cent, closing at LE250.07 per share. Orascom Telecom, the largest Arab mobile operator by subscribers, shed 0.94 per cent to LE5.27 per share. Globally, a Wall Street Journal report said Europe's recent "stress tests" of the strength of major banks underestimated some lenders' holdings of potentially risky government debt, Reuters reported. This helped rekindle concerns about the vulnerability of the sector after Germany's banking association said on Monday the country's 10 biggest banks may need 105 billion euros of additional capital. Such worries prompted investors to consolidate their positions after an upbeat US jobs report last Friday triggered a broad rally in risky assets. "It's shedding more light on how effective the stress tests were and how much they revealed ... bringing those fears back on the table," said Commerzbank rate strategist David Schnautz. The FTSEurofirst 300 index dropped half a per cent, led by banking shares such as Societe Generale. The euro fell 0.6 per cent to $1.2793 while it lost more than one per cent to 107.10 yen. Safe-haven assets were in demand. Bund futures rose 63 ticks while the US 30-year Treasury bond gained a full point in price, driving its yield down 6.5 basis points to 3.729 per cent. "There is still is some doubt about economic growth in the second half," said Koen De Leus, economist at KBC Securities. "We have just had a relief rally and investors are waiting to see what direction the economy is going to take in the second half." Emerging stocks lost around a third of a percent. Elsewhere, the dollar rose 0.4 per cent against a basket of major currencies. US crude oil fell 1.5 percent to $74.37 a barrel, in part weighed by a strong dollar. The Bank of Japan held off on loosening monetary policy further on Tuesday but said it would take timely action when necessary, setting the stage for possible easing next month when there is clearer evidence of the strong yen's impact on the slowing economy.
