Egypt stocks plunged Sunday in high turnover as banks hike interest rates amid ambiguity surrounding the Russian plane crash that threatens tourism and the government arrest of a businessman, analysts say.
The benchmark EGX30 index tumbled by 2.58 percent to 7,347 points with daily stock turnover reaching around LE482 million.
"The market dived down after a hike in interest rates by National Bank of Egypt and Banque Misr to its highest rate since the 1990s," Ihab Saied, financial analyst at Osool Brokerage, told Ahram Online.
Egypt's two largest state banks launched investment certificates in Egyptian pounds at an interest rate of 12.5 percent, official news agency MENA reported Sunday.
The rate rise could harm companies' profitability and decrease liquidity in the stock market, Saied said.
"There was also a general negative mood in the stock exchange on the back of ambiguity surrounding the Russian plane crash and the arrest of businessman Salah Diab," Saied said.
The UK, one of the main tourist exporters to Egypt, suspended all flights by UK-based airlines over Sinai after fears that an explosive device likely caused last weekend's crash. Russia also suspended all flights to Egypt Friday.
Authorities have also arrested businessman Salah Diab whose assets have been frozen this week as part of investigations on alleged corruption in the acquisition of land during the rule of ousted president Hosni Mubarak.
Arab investors, with 10 percent of trade, were net buyers to the tune of LE36.6 million while Egyptians, contributing 80 percent to all trade, were net sellers to the tune of LE12 million.
Porto Group, real estate developer for touristic resorts, was the main index's biggest decliner, falling 6.67 percent to LE0.43 per share, followed by Ezz Steel that dropped 6.3 percent to LE9.1 per share.
Market bellwether Commercial International Bank (CIB) fell 2.26 percent to LE52 per share with turnover of LE41.8 million.