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Egypt's main stock index falls 2.33 percent over fears of US economic recession
(MENAFN) On Monday, Egypt's main index fell by 2.33 percent, closing at 27,840.6 points. The decline was influenced by fears of an impending economic recession in the United States and concerns about the escalating conflict in the Middle East. Shares of prominent companies such as Eastern Company for Tobacco dropped by 5.8 percent, Commercial International Bank by 1.2 percent, El Sewedy by 6.4 percent, Madinet Misr for Housing and Development by 5.4 percent, Ezz Steel by 2.8 percent, Talaat Moustafa Group by 2.1 percent, and E-Finance for Financial Investments by 0.8 percent.
A UK news agency reported that the unemployment rate in the United States rose to 4.3 percent in July, the highest level in three years. This increase, coupled with a significant slowdown in hiring, indicates potential weaknesses in the labor market and heightens the risks of a recession. The regional geopolitical climate also contributed to the market's downturn. Israel and the United States are bracing for a serious escalation in the Middle East following threats of retaliation from Iran, Hamas, and the Lebanese Hezbollah militia after the assassinations of Ismail Haniyeh, head of Hamas’s political bureau, and Fuad Shukr, a senior military commander in Hezbollah.
Mona Badir from Al Baraka Bank stated that the Egyptian Stock Exchange and the Egyptian pound are under considerable pressure due to the geopolitical tensions in the region. She emphasized that the anticipation of Iran's response to the escalations is creating significant stress on assets denominated in local currency. Badir highlighted that the fragile environment is exacerbated by risks of this nature, impacting investor confidence and market stability.
Additionally, Badir noted that there are significant changes occurring, particularly the noticeable exits from local debt instruments and financial assets denominated in local currency. This trend aligns with the regional risks and reflects investor apprehension. Concurrently, the dollar reached its highest price against the Egyptian pound since March, surpassing 49 pounds during Monday's trading session, further indicating the economic strain.
A UK news agency reported that the unemployment rate in the United States rose to 4.3 percent in July, the highest level in three years. This increase, coupled with a significant slowdown in hiring, indicates potential weaknesses in the labor market and heightens the risks of a recession. The regional geopolitical climate also contributed to the market's downturn. Israel and the United States are bracing for a serious escalation in the Middle East following threats of retaliation from Iran, Hamas, and the Lebanese Hezbollah militia after the assassinations of Ismail Haniyeh, head of Hamas’s political bureau, and Fuad Shukr, a senior military commander in Hezbollah.
Mona Badir from Al Baraka Bank stated that the Egyptian Stock Exchange and the Egyptian pound are under considerable pressure due to the geopolitical tensions in the region. She emphasized that the anticipation of Iran's response to the escalations is creating significant stress on assets denominated in local currency. Badir highlighted that the fragile environment is exacerbated by risks of this nature, impacting investor confidence and market stability.
Additionally, Badir noted that there are significant changes occurring, particularly the noticeable exits from local debt instruments and financial assets denominated in local currency. This trend aligns with the regional risks and reflects investor apprehension. Concurrently, the dollar reached its highest price against the Egyptian pound since March, surpassing 49 pounds during Monday's trading session, further indicating the economic strain.
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