Egyptian stock market defies global gloom over euro woes

Election euphoria helped to push up Egyptian shares yesterday, even as bourses across the world tumbled on fears that the euro-zone crisis was deepening.

For every share that declined on the Cairo exchange, eight advanced as Egyptians headed to polling stations to vote for a president.

"Egypt is against the trend today," said Tariq Qaqish, the deputy head of asset management at Al Mal Capital in Dubai. "Egyptian stocks are reacting to domestic news regarding the elections as opposed to what's happening on the international front."

The EGX 30 Index rose 1.1 per cent to 4,918.61, bringing its yearly gain to 35.79 per cent. Other analysts said they expected the trend to continue if the elections ran smoothly and results were announced.

"Political stability is the key," said Mohammed Ali Yasin, an independent analyst in Abu Dhabi. "We should see a strong move, similar to the rally at the close of the parliamentary elections, when we know which political party has won and who is president."

The new leader is expected to be sworn in at the end of next month.

Gulf stocks declined, tracking global markets, as investors cut positions in risky assets ahead of a euro-zone meeting in Brussels late yesterday where leaders were expected to discuss the worsening debt crisis and Greece's possible exit from the euro zone.

Haissam Arabi, the chief executive of Gulfmena Investments in Dubai, said investors were keen to see signs of new stimulus for the European economy.

The FTSE 100 Index fell 1.7 per cent to hit 5,308.94, Germany's DAX fell 1.4 per cent to 6,339.79, and France's CAC 40 shed 1.9 per cent to 3,024.93 in afternoon trading. The euro tumbled to US$1.2615, its lowest level since August 2010.

"It's not about technicals or fundamentals any more. Pure sentiment and fear [are] driving investment decisions," Mr Arabi said. "If the Europeans are not going to get their act together, they are going to affect the whole world."

In Asia, Japan's Nikkei fell 1.9 per cent to 8,556.60, while Hong Kong's Hang Seng dropped 1.3 per cent to 18,786.20.