CAIRO: Egypt's benchmark index fell 2 percent, its biggest decline since May 19, after clashes between Egyptian police and youths in Cairo's central Tahrir Square overnight left more than 1,000 people injured. It was the first such violence in weeks in the square, the scene of protests that ousted president Hosni Mubarak in February. Police fired tear gas on Wednesday at hundreds of mainly young Egyptians who threw stones at police lines. "The market is of course dipping," said investment and capital market analyst Nader Khedr. "Blood has been spilled in Tahrir Square again." All but three stocks on the 30-stock index fell with most sales from foreigners. Pioneers Holding and Ezz Steel were the two biggest losers, slumping 9.9 percent and 9.1 percent each. "I think this fall is exaggerated but if there is further escalation, the fall will continue tomorrow, or at least for the first quarter of the session," Omar Darwish of CIBC Brokerage said. "We are all waiting to see whether it is going to continue or not." The index was also pushed down by investors locking in profits at the end of Egypt's financial year, traders said. "It is the end of the fiscal year, so investors are closing positions," said Mohamed Seddiek, head of research at Prime. "This is always what we see on and around June 30." Commercial International Bank shed 2.2 percent and EFG-Hermes 3.1 percent. Real estate stocks, which have been hard hit by long-running legal rows over their land banks, also fell on concerns that possible compromises with the government to settle the disputes may be less favorable to investors than previously hoped. An old dispute between a group of banks and an Egyptian businessman over loan repayments flared up once more this week and the businessman said he would seek international arbitration. The case has unnerved investors for its potential impact on other disputes, traders say. "It is about you reaching an agreement and then stopping this and going back to court. If that happens in this case, what would happen to the unresolved ones?" Khedr said. Property developers Talaat Moustafa Group and Palm Hills slid 4.8 percent and 8.5 percent respectively. Egyptian Resorts and SODIC both fell 7.9 percent. Ajwa for Food Industries, one of the only gainers, jumped 10 percent, the second day of gains after Egypt's markets regulator ordered its chairman to buy back shares in the company that he sold in 2009. The index closed at 5,283 points.
