Egypt's bourse made its biggest one-day drop since June 2 on Wednesday, after overnight clashes in Cairo between police and youths, while Saudi shares rose on hopes of healthy earnings. The clashes left 590 people injured. It was the first such violence in weeks in Tahrir Square, the scene of protests that ousted President Hosni Mubarak in February.
The index fell 2 percent to its lowest level since mid-May as all but three shares on the 30-stock benchmark fell, with most sales from foreigners. "The market is of course dipping," said investment and capital market analyst Nader Khedr. "Blood has been spilled in Tahrir Square again." Pioneers Holding and Ezz Steel slumped 9.9 percent and 9.1 percent respectively.
"I think this fall is exaggerated but if there is further escalation, the fall will continue tomorrow, or at least for the first quarter of the session," Omar Darwish of CIBC Brokerage said. "We are all waiting to see whether it is going to continue or not." In Saudi Arabia, shares rose as rebounding oil and global markets bolstered sentiment among the kingdom's investors, with some taking positions ahead of the start of second-quarter earnings season next week.
World stocks rose for the third straight day while oil prices jumped on Wednesday after Greece's parliament approved a five-year austerity plan designed to prevent the country from going bankrupt. "After the dip we had, people were looking for an excuse to buy and we're getting it from (positive) international situation," said a Riyadh-based fund manager on condition of anonymity.
"Key numbers start on Saturday and there's been position building on that. People are expecting strong numbers, especially for petrochemicals." The Saudi benchmark gained 0.7 percent, up in four of past five sessions. The petrochemical index rose 1 percent and the banking benchmark climbed 0.7 percent.
Bellwether Saudi Basic Industries Corp added 1.2 percent and Al-Rajhi Bank advanced 0.3 percent. Telecoms firm Mobily scaled 1 percent, hitting a five-week high and extending gains since the operator said it aims to complete a tower sharing deal with rival Saudi Telecom Co by year-end. STC ended flat.
In Dubai, the index rose 0.6 percent, lifting from Tuesday's three-month low, after the UAE cabinet extended visas for real estate investors to three years from six months Dubai's Emaar Properties rose 2 percent, Deyaar added 1.4 percent and builder Arabtec climbed 2.4 percent.
"The UAE federal cabinet decision will significantly enhance investor confidence and drive the growth of the country's property sector," Mohammed Alabbar, chairman of Emaar, said in a statement on Wednesday. Abu Dhabi's real estate stocks also made gains on the news, with Aldar Properties rising 1.6 percent and Sorouh Real Estate advancing 1.7 percent.