Egypt’s stock exchange plunged more than 5% at Sunday’s open as the U.S.-Israeli war on Iran shook regional markets, before trimming losses to close down 2.5% at 47,984 points on the EGX30 index.
The selloff followed escalating geopolitical tensions after the outbreak of war on Iran, with spillover effects across several countries in the region. Foreign investors led the retreat, amid mounting uncertainty over the conflict’s trajectory.
“Geopolitical tensions triggered a wave of selling, increasing foreign investors’ net sales during today’s session, which is natural given the current crisis,” said Yasser El-Masry, vice chair ofArab African International Securities, speaking to Al Manassa.
Foreign investors recorded net sales of 271.4 million Egyptian pounds ($5.6 million), while Arab investors posted net sales of 114.8 million pounds. In contrast, Egyptian investors were net buyers at 386.3 million pounds, helping the market absorb part of the shock.
Walaa Ahmed, head of research at Prime Securities, said sharp price declines created buying opportunities, especially in stocks that reached attractive levels. That encouraged local investors to increase purchases.
Ahmed said the exchange is likely to withstand the war’s impact in the coming sessions. “As we have seen in previous crises, once geopolitical tensions ease, the market returns to normal,” she said, projecting the EGX30 to hold near the 47,000-point level, which she described as strong technical support.
El-Masry warned that if fighting in Iran continues, the main index could fall to between 44,000 and 45,000 points.
The escalation coincided with the first day of trading in futures contracts on Egypt’s main index, a tool designed to hedge against declines in share prices.
El-Masry said the timing underscored the importance of such instruments in managing market risk. However, demand remained limited on the debut session due to the small number of brokerage firms currently licensed to trade futures.
A source at a licensed brokerage firm told Almanassa that 52 futures contracts were executed on the first day of trading.
Dollar jumps, gold takes flight
The conflict’s most visible domestic impact appeared in the foreign exchange and gold markets. The dollar rose to 48.62 pounds for sale, up from 47.84 pounds at the end of last week — an increase of about 76 piasters in a single session.
Local gold traders sharply raised prices after the outbreak of the U.S.-Israeli war on Iran as a precautionary hedge, even before global bullion markets reopened following the weekend, two traders told Almanassa.
On Saturday, the price of 21-karat gold — the most traded in Egypt — climbed 400 pounds to 7,475 pounds per gram. It rose another 100 pounds on Sunday by the time of publication.
Gold prices had already neared a one-month high by the end of last week, posting gains for a seventh consecutive month, supported by geopolitical tensions and falling U.S. Treasury yields, according to a CNBC Arabia report.
Hany Milad, head of the Gold and Jewelry Division at the Federation of Chambers of Commerce, said uncertainty is dominating the market due to the temporary closure of global exchanges, resulting in volatile and inconsistent local pricing.
Price discrepancies stem from the absence of a clear global benchmark while trading abroad remains suspended, prompting some traders to post estimated prices that may not reflect fair value, Milad said. He expects prices to continue rising once international metals exchanges resume trading.
Lotfy Moneib, deputy head of the Gold and Jewelry Division, said the market is in a state of caution, with relatively subdued buying and selling activity as traders await political developments and their direct impact on the dollar and global ounce prices.
He said attention is focused on the performance of international markets when trading resumes, amid expectations of continued sharp volatility if tensions escalate further — a scenario that could push gold to unprecedented levels in the coming days.
