EGX plummets hammered by local institution sales
Egyptian Exchange - AFP/Marco Longari

CAIRO: The Egyptian Exchange (EGX) plunged Thursday and market capitalization lost around 4.6 billion EGP ($643.1 million) hurt by selling pressures led by local institutions.

The benchmark index EGX30 fell by 1.16 percent to hit 9,475 points, compared to 9,578 points Wednesday. The small and mid-cap index EGX70 ended on a 2 percent decline after reducing morning losses, registering 611 points, down from 624 points last session, and the broader index EGX100 also decreased by 1.74 percent to reach 1,118 points.

Market capitalization slipped to 516.5 billion EGP, compared to 521.1 billion EGP in its last session.

“The EGX 30 breached below the support level of 9,500 points, and this may drag it lower towards 9,290 points,” Technical Analysis Desk head at Naeem Brokerage Ibrahim El-Nemr told The Cairo Post.

He advised investors to reduce their positions, with the stop-loss limit set at 9,500 points.

Meanwhile, the EGX 70 breached below its short-term support of 630 points, indicating that the selling pressure may drag the index lower to test the support level of 605 points and then 585 points, the analyst added.

“Investors are recommended to sell the rally and wait for a buy signal,” he added.

El-Mokattam Securities Brokerage technical analyst Walid Helal told The Cairo Post that local institution sell-offs were behind the sharp decline, while Arab and foreign traders tended to purchase.

“The market resumed its negative performance during today’s session, confirming its intention to ride a corrective wave after reaching the 9,750-point peak,” said Helal.

In a statement to The Cairo Post in the mid-session, Helal predicted that “the bulls will appear slightly after this plunge, leading many stocks to rebound from their sharp decline for three sessions in a row.”

He continued, “The heavyweight CIB stock sustained its level, preventing the market from a possible collapse.” Also, the ginning sector rebounded while real estate and contracting sectors started to recover, the analyst said.

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