Egyptian stocks extended their recent losses on Tuesday as a legal challenge raised the prospect of fresh delays in the writing of the country's long-awaited new constitution.
After a brief rally the benchmark EGX30 saw its third fall of the week, slipping 0.76 per cent to close at 4,558.6 points amid a large-scale sell-off of telecoms stocks seemingly prompted by a newspaper report about a mooted fourth mobile phone operator.
Tuesday's edition of Al-Mal, an Egyptian business newspaper, quoted the country's telecommunication minister as saying that any potential fourth mobile operator should be majority-owned by Egyptian shareholders.
The news, however, may have been misinterpreted by investors as a sign that Egypt's authorities had given the green-light to a new operator -- a move that has long under discussion by the country's telecoms regulator.
Shares in Mobinil, the only mobile operator listed on the exchange, plummeted 7 per cent.
"Investors thought that the government had already named a company for the fourth mobile network in Egypt -- new competition like that could hit Mobinil's profits," market analyst Mostafa Badry told Ahram Online.
More than a quarter of the day's trade was in telecoms stock. Two other firms in the sector also took serious hits, with Telecom Egypt and Orascom Telecom Media and Technology falling 3.44 and 3.85 per cent respectively.
Orascom Telecom, however, swung back into the green after several days in the doldrums, finishing the day up 2.5 per cent.
From 174 listed stocks, 32 gained in value and more than 120 declined, fuelling a 1.26 per cent drop for the broader EGX70 index.
Despite the losses, there were a few high-profile gainers. Egypt's largest listed firm Orascom Construction Industries edged up 0.29 per cent; the Commercial International Bank saw its stocks climb 1.7 per cent.
Total trade volume was a thin LE348 million ($57.6m) with foreign investors responsible for a smaller-than-normal 21 per cent of trade.
Market activity has been squeezed over the last two months as political tensions have built between Islamist and secular political groups and the ruling military.
On Tuesday an Egyptian court halted moves to create a new Constitutent Assembly pending a ruling on its legality -- a move that challenged the legitimacy of a body dominated by Islamists.
The injunction could delay the writing of a constitution badly needed to outline the powers of Egypt's new head of state, scheduled to take over from the ruling junta by summer.
Egyptians were the day's sole net-buyers, scooping up LE18 million of stock, their purchases offset by the defensive moves of foreign investors and other Arabs.