Egypt’s stock market was among the first to feel the impact of the US’s credit downgrade as trading resumed Sunday, its main index dropping to its lowest level in almost two and a half years as foreign investors staged large-scale sell-offs.

The benchmark EGX30 plunged 4.17 per cent to 4,799 points, a level it last reached in April 2009.

“The US debt crisis was the main cause, and also the reason for falls in markets across the entire region,” said Ashraf Abdel Aziz, head of institutions sales at Arabia Online Securities.

He suggested its recent travails may have cushioned Egypt's stock exchange from even greater losses.

“The Egyptian market is already suffering so any negative piece of news would have a quick impact on the shares, but what happened was relatively normal, not huge,” said Abdel Aziz.

Total market turnover was a squeezed LE318.86 million. From a total of 179 listed stocks, 168 lost value and a mere 8 saw gains.

Foreigners led the exit, net-selling a net LE31.6 million of stock, while non-Arab investors offloaded LE5.48m, leaving Egyptians – who made up 84.6 per cent of the day’s trades – the sole net-buyers.

Trade was focused on high-caps Orascom Telecom, Pioneer Holdings and Egyptian Electrical Cables, all of which saw losses in excess of 4 per cent.  

Despite small upticks in seven stocks, the only significant gainer was Egyptian Chemical Industries which soared 9.97 per cent.

Individual traders, responsible for 73 per cent of trade, became net-buyers with Abdel Aziz saying local speculators were positioning themselves to pick up cut-price stock in the coming days.

“They assume that, as before, every sharp dip will be followed by a greater rebound,” he said.

Egypt’s Bourse was just one of the exchanges across the Middle East to see a sharp drop following the Friday downgrade of the US’s top-tier credit rating by Standard & Poor’s.

The stock market is one of the parts of the Egyptian economy most likely to see an impact from the US downgrade, local economists told Ahram Online.

Main indexes for Dubai, Abu Dhabi, Qatar and Israel all posted losses of between 2.5 and 6 per cent on Sunday.

Only Saudi Arabia, the Arab world’s largest exchange by volume, reversed the trend, rallying after an opening plunge of 5.45 per cent to finish 0.08 per cent up.