Egypt crisis takes its toll on markets

Steve Dinneen
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EGYPTIAN President Hosni Mubarak clung with a grim determination to power last night as pressure on him to step down intensified.

Outbursts of violence escalated as anti-government protests threatened to descend into chaos, sending markets tumbling across the region.

At least four prisons were stormed by armed raiders and the Egyptian Museum in Cairo was among the targets of looters.

The Egyptian military, which has been praised for its restraint, moved to show its strength yesterday, with troops fanning out in an attempt to quash the violent outbursts and jets flying overhead.

Countries including the US, Israel, Turkey and Canada sent aircraft to evacuate their nationals, while British foreign secretary William Hague advised against non-essential travel to Cairo, Alexandria and Suez.

Opposition leader Mohamed ElBaradei called for patience when he addressed protestors in the capital yesterday, promising “change is coming in the next few days”.

The Nobel peace prize winner has been asked by opposition groups to try to force through a national unity government by working with authorities.

Markets across the Middle East followed the lead of the Egyptian index, which was closed yesterday after falling 16 per cent in two days last week.

Dubai led regional declines as its index fell 4.5 per cent to a 21-week low, with companies exposed to Egypt among the biggest losers.

Saudi Arabia’s index fell to a three-month low in initial trade, but subsequently rose to end 2.4 per cent higher, rebounding following Saturday’s 6.4 per cent drop, its largest in eight months.

The main Abu Dhabi market fell 3.7 per cent, continuing a two week nose-dive.

Martin Slaney, director of global dealing operations at GFT, said he expects the FTSE 100 to open down 49 points this morning, adding: “European stock markets are all expected to trade lower on the open this morning, following the heightened turmoil witnessed in Egypt over the weekend.”

Israeli stocks suffered their biggest one-day fall since November 2008, with an index of 25 blue-chip stocks on the Tel Aviv Stock Exchange ending 3.8 per cent lower.

US oil prices surged more than four per cent on Friday, with analysts fearing disruptions to the Suez Canal, the waterway that is responsible for shipping around a million barrels of crude and refined oil every day.