CAIRO - Big caps pulled Egypt's main index down on Tuesday, ending a two-day gaining streak, traders said. The country's benchmark index EGX 30 plunged by 2.09 per cent, to 4,967.04 points. The broader indexes EGX 70 and EGX 100 were also in the red, falling by 1.71 and 1.69 per cent to 631.02 and 939.74 points respectively. Arabs and non-Arab investors made net sell-offs worth LE18.8 million ($3.2 million) and LE11.7 million respectively, according to Bourse data. Locals made net purchases worth LE30.5 million. Volume totalled LE339 million, according to Bourse data. Egypt's heavyweight Commercial International Bank (CIB) fell by 1.51 per cent to LE26.76 per share. EFG-Hermes, the country's biggest investment bank by market value, plunged by 2.58 per cent to LE18.89 per share. Orascom Construction Industries (OCI) slid by 1.84 per cent to LE258.36 per share. Orascom Telecom, the largest Arab mobile operator by subscribers, dipped by 3.34 per cent to LE3.76 per share. Meanwhile, world stocks hit a one-month low and the euro fell broadly as investor focus shifted back to weak global growth prospects and the eurozone debt crisis after a US budget deal that will lead to spending cuts of over $2 trillion, Reuters reported. Sluggish US and global manufacturing data on Monday added to concerns about the world economic recovery, while concerns that Spain and Italy will be the next victims of the eurozone crisis drove benchmark government bond yields to 14-year highs. An 11th-hour deal to raise the US debt ceiling cleared its biggest hurdle in the House of Representatives, staving off the prospect of a default. But fears persisted that Washington could still lose its triple-A credit rating. "It looks like investors have just forgotten about the debt ceiling deal in Washington and instead are focusing on the economic data, which was clearly weaker than anticipated," said Bill McNamara, analyst at Charles Stanley. MSCI's world equity index fell 0.7 per cent on the day, to its weakest since June 28. The benchmark index is almost flat since January. European stocks hit a 10-month low while Italian shares fell to 27-month troughs. "The fear of the market is that the world is going into recession again... and in the euro zone the peripheral markets are the ones that will suffer most," said Alessandro Giansanti, strategist at ING in Amsterdam. Emerging stocks dropped 1.3 per cent, while US stock futures were down around 0.4 per cent. The dollar rose 0.3 per cent against a basket of major currencies while the euro fell 0.4 per cent to $1.4197. The US currency lost 0.1 per cent to 77.31 yen, having come within a few ticks of its record low on Monday. The yen's strength drew warnings from Japanese officials of possible action to stem its rise and nudged the Bank of Japan closer to a further easing in monetary policy. The 10-year Spanish government bond yield rose to 6.47 per cent, its highest since 1997, pushing its yield premium over benchmark German Bunds out to 403 bps. The two countries have been under increased pressure in recent weeks as markets feel the size of the eurozone's EFSF bailout fund is too small to protect larger fringe economies if contagion from the Greek crisis cannot be stopped. Weakening global recovery momentum could also make it harder for peripheral countries to service their debt. "The positive tone seems to have evaporated after the ISM figures yesterday ... and 6 percent was seen as a line in the sand for Italian yields and now that that's gone people don't want any risk apart from Germany," a euro zone bond trader said.
