Driven by Arab buying, Egyptian stocks took a dive on Tuesday, traders said. The country's indexes followed world markets down, they added. World stocks shed early gains and the dollar rose as investor optimism subsided after gloomy euro zone economic data and as expectations for rapid monetary tightening faded. The North African country's benchmark index EGX 30 fell by 1.9 per cent, ending the day's trading at 6,574.57 points. The EGX 70 index, which measures 70 of the country's small and mid caps, plunged by 2.6 per cent to 745.3 points. Volume hit LE845 million ($154 million), according to the Egyptian Exchange. Orascom Construction Industries, Egypt's largest builder by market value, dipped by 2.4per cent, closing at LE241.25 per share. Orascom Telecom, the largest Arab mobile operator by subscribers, shed 1.64 per cent to LE5.98 per share. "There is a little bit of uncertainty. The market is still trying to make up its mind. This time the bears and the bulls are more or less in equilibrium, but I think that the bears will soon get the upper hand again," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels. The dollar was 0.2 per cent higher on the day against a basket of currencies. The euro turned lower against the dollar after the German Ifo institute's business climate index fell to 95.2 in February, lower than forecasts for 96.1. "The Ifo survey is a big indicator for the euro zone economy as a whole and the weak number certainly wasn't helpful for the euro," said Paul Robson, a currency strategist at RBS. Eurozone government bond yields drifted lower on the weak data as the market awaited a Greek bond issue. Sterling fell sharply after Bank of England (BoE) chief Mervyn King said in parliamentary testimony the central bank could increase quantitative easing if the economy worsens and the recovery remained fragile. The BoE paused its 200-billion sterling asset buying programme earlier this month. US Federal Reserve Chairman Ben Bernanke is scheduled to testify to congress on the central bank's exit strategies on Wednesday, but speculation of a near-term rise in US interest rates stemming from a discount rate increase last week has cooled. US Treasuries edged higher although gains were limited ahead of the next instalment of this week's record bond issuance. San Francisco Fed President Janet Yellen was the latest policymaker to stress the move to raise the rate on emergency loans was not a sign for rapid monetary tightening. The US economy still needed extraordinarily low interest rates, as inflation was "undesirably low" and growth would likely be sluggish for several years, she said. Meanwhile, most Asian stock markets recouped early losses on Tuesday while the dollar was trapped in a tight range as investors waited for Federal Reserve Chairman Ben Bernanke to shed light on how soon key US interest rates may start to rise. Hong Kong's Hang Seng also shook off early losses to climb 1.2 per cent, extending a jump the previous day. But Ping An Insurance, China's second-largest insurer, fell 2.7 per cent after it said three of its mainland shareholders would sell shares over the next five years. The news sparked a sell-off its Shanghai shares, helping drag down the main index 0.7 per cent. Japan's benchmark Nikkei fell 0.5 percent in thin trade but managed to bounce off its 25-day moving average after breaking above it in a 2.7 per cent rise the previous day.
