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Posted at 11:31 AM ET, 01/28/2011

Egypt riots weigh on the nation's stock market

By Sarah Halzack

egyptstock.JPG

An Egyptian family walks past the closed Egyptian stock exchange building in downtown Cairo, Egypt. (Photo Credit: AP Photo/Victoria Hazou)

Undoubtedly, the pro-democracy demonstrations in Cairo have a host of consequences, from injured protesters to broad uncertainty about the future of President Hosni Mubarak's leadership.

But there is a financial fallout to the turmoil, too. On Thursday, Bloomberg News reported that Egypt's benchmark index, the EGX 30, took a 10 percent dive. It was the index's largest one-day drop in more than two years. In fact, officials went so far as to temporarily halt trading in the markets.

More bad news came Friday, when Fitch Ratings revised its outlook for the Middle Eastern nation to "negative," though the agency made no change to its credit rating.

The Associated Press reports:

Fitch said that while it doesn't expect Egypt's macroeconomic outlook to be seriously affected as a result of the protests, it noted that serious challenges remain, such as high youth unemployment and food inflation running at about 17 percent per year.

"The severity of the macroeconomic impact will depend on political developments in the days and months ahead," Fitch said in a statement.

As protests appear to gain strength in Cairo and other cities, Egypt's markets and the value of its currency could be in for further losses.

By Sarah Halzack  | January 28, 2011; 11:31 AM ET
Categories:  International Economics  
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Comments

Egypt is finally being set free from the shackles of a corrupt dictator.

Despite an unprecedented effort to shut down the internet in Egypt, the tyrant has failed to silent the voice of the people.

As I write, the ruling party's headquarters is on fire and the army are on the street. Hopefully, they will read the riot acts to Mubarak. Your time is up, Mubarak. Go into exile, US will welcome you with open arms.

Posted by: dressypink | January 28, 2011 11:53 AM | Report abuse

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