For the second day in a row, Egyptian indexes gained on Thursday on foreign buying, traders said. Following global markets, the country's main index EGX 30 added 109 points, they added. Global equities rallied on Thursday as President Barack Obama seemed to tone down demands on banks which prompted the dollar to come off five-month highs, according to Reuters. Demand for riskier assets were spurred as investors were relieved Obama did not slam banks and Wall Street anew after days of heightened unease about restrictions on bank risk-taking that Obama proposed last week, which helped fuel a global market sell-off. The North African country's benchmark index EGX 30 jumped by 1.66 per cent, ending the week's trading at 6,696.07 points. The EGX 70 index, which measures 70 of the country's small and mid caps, leapt by 2.44 per cent to 699.12 points. Volume hit LE1.1 billion ($201 million), according to the Egyptian Exchange. Orascom Telecom, the largest Arab mobile operator by subscribers, jumped by 5.29 per cent to LE27.45 per share. Orascom Construction Industries, Egypt's largest builder by market value, inched up by 1.5 per cent, closing at LE263.42 per share. In his State of the Union speech, Obama pushed job creation to the top of his agenda to bring down high unemployment, while continuing financial and health care reform. World stocks as measured by the Morgan Stanley Capital International (MSCI) were up 0.6 per cent. European shares gained 1.3 per cent, bouncing back from a sharp one-week slide, and following gains in Asia and on Wall Street overnight. Banks, beaten down over the past week by worries over the White House's plan to curb risk-taking by financial institutions, were among the top gainers in Europe. "The violence of the sell-off has been surprising, investors panicked," said Jacques Henry, analyst at Louis Capital Markets, in Paris. "But I don't think this has been a change in trend. Macro data is pointing into the other direction." The Federal Reserve kept interest rates steady as expected and gave a cautiously upbeat view on the economy, also buoying shares, though the central bank delivered a surprise as one policymaker dissented on language to keep rates low for an extended time. The Treasury yield curve flattened as the difference between the short- and long-term yields narrowed and the dollar rallied to 5-month highs against a basket of currencies as Kansas City Fed President Thomas Hoenig's dissent raised speculation of higher US interest rates. A Reuters poll taken shortly after the Fed's decision showed nine of the 15 primary dealers responding said they expected the Fed to start raising interest rates this year. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.1 per cent at 78.568. It rose as far as 79.066, its highest since August last year. The euro remained under pressure on concerns over the heavily indebted smaller euro zone countries such as Greece and Portugal. On Wednesday, the premium to hold Greek debt rather than benchmark German bonds soared to its highest since the euro was launched more than a decade ago. "Sentiment definitely remains negative for the euro because of the Greece problem," said Lutz Karpowitz, currency strategist at Commerzbank in Frankfurt. "I thought the Greece story would eventually die down, but that doesn't seem to be the cause, and there are more countries in the pipeline (who are facing debt problems)." US ratings firm Standard & Poor's said on Thursday it would look beyond Portugal's 2010 budget to the country's updated EU stability plan before deciding on a potential downgrade. It changed the outlook on Portugal's rating to negative last month.
