CAIRO - For second day in a row, Egyptian stocks were in the red on Monday US ratings downgrade worries, traders said. The country's benchmark index EGX 30 fell by 2.04 per cent to 4,701.08 points. The broader indexes EGX 70 and EGX 100 shed 2.96 and 2.84 per cent to 591.73 and 883.93 points respectively. Arabs made net sell-offs worth LE9.5 million ($1.6 million), while locals made net purchases worth LE8.3 million, according to Bourse data. Egypt's heavyweight Commercial International Bank (CIB) slipped by 0.42 per cent to LE25.8 per share. EFG-Hermes, the country's biggest investment bank by market value, fell by 3.8 per cent to LE17.46 per share. Orascom Construction Industries (OCI) plunged by two per cent to LE244.86 per share. Orascom Telecom, the largest Arab mobile operator by subscribers, shed 1.74 per cent to LE3.39 per share. Volume totalled LE397 million, according to Bourse data. Meanwhile, world stocks racked up more losses on deep-rooted jitters about the US ratings cut, but signs the European Central Bank was buying Italian and Spanish debt gave some respite to battered bond markets, Reuters reported. European share were down 1.5 per cent after earlier putting in gains on the ECB action to take the heat out of the spreading eurozone debt crisis. Five-year yields in Italy and Spain fell around a full percentage point, spreads against German debt narrowed and the cost of insuring them against default dropped. Investors were coming to grips with a weekend of talks between industrialised countries aimed at safeguarding the smooth functioning of financial markets following agency S&P's cut in its US rating late on Friday to AA-plus from AAA. "The downgrade to the US is not great. These markets are going to remain unsettled for a while, we had recommended investors to raise cash in anticipation of this volatility," said Mike Lenhoff, chief strategist at wealth manager Brewin Dolphin. MSCI's all-country world index was down nearly three quarters of a per cent, extending a heavy bout of selling on risk aversion that last week chopped around $2.5 trillion off the value of the index. Emerging market stocks fell a further two per cent. European shares as measured by the FTSEurofirst 300 index struggled into positive territory but then went into reverse, dropping 1.5 per cent. The euro rose against the dollar and trimmed losses against other currencies. The US currency fell across the board after Friday's S&P downgrade, struggling close to record lows against the Swiss franc and the yen. But the euro's gains were limited, and some analysts expected it would struggle to gain significantly, as bond purchases, while adding temporary liquidity to stressed debt markets, would do little to improve the fiscal problems in the region.
