CAIRO (AP) — The Egyptian stock exchange's benchmark index tumbled 2 percent on Wednesday, dragged down by new clashes in the iconic Cairo square that served as the epicenter of the protest movement that ousted former President Hosni Mubarak. The benchmark EGX30 index closed at 5,283 points, shedding 2.03 percent from its previous day's settlement as overnight fighting between security forces and hundreds of protesters in Tahrir Square highlighted the continuing tension in the Arab world's most populous nation. Egypt is struggling to rebuild its economy, which was battered by the 18-day uprising that began Jan. 25 and ended with Mubarak handing over power to the military. "To be honest, we were expecting worse than this," Khaled Naga, a broker with Mega Investments, said, referring to the drop in the market. The past week has seen some weakness in the market, but "the Tahrir situation made things worse." The protests that erupted Tuesday night rekindled memories of the fighting that surfaced in the first few days of the initial uprising. Security forces clashed with hundreds of protesters in the downtown Cairo square, firing tear gas as the demonstrators lobbed rocks. The protesters were demanding the acceleration of the prosecution of police accused of brutality in the uprising. The clashes continued into Wednesday, albeit on a smaller scale. Since the revolution, Egyptian officials have been struggling to revive the economy amid continued labor strikes that had initially battered exports and manufacturing at the same time as two of the country's chief cash cows, tourism and foreign direct investment, were taking a drubbing. Losses were spread throughout the various sectors on the market. Shares of investment bank EFG-Hermes Holding slumped 3.02 percent while Ezz Steel, the country's largest steel maker, fell 5 percent. The Egyptian Exchange had remained shuttered for about two months after the start of the uprising, and reopened in late March to losses far lower than the collapse many had anticipated. Since then, it has seesawed, but year-to-date losses are still at about 26 percent. The transitional government and the country's military rulers have been pushing to show a sense of normalcy. Parliamentary elections are slated for September — even as some seek delays — and a presidential vote is to take place in November. But countering that picture of stability are the continued protests and sectarian tensions that many fear could drive deeper wedges between the Muslim majority and the Coptic Christian minority. Meanwhile, business delegations have visited the country, the latest from the United States. It was headed by two leading senators. Officials portray the visits as indications that investors are still keen to pump money into the country and have tried to encourage companies to invest in some of the many major infrastructure projects that are key to creating jobs and alleviating the rampant unemployment that stoked unrest over the past two years.
