Equity markets lower on Egyptian crisis

Equity markets around the world started the week lower amid concerns over the ongoing civil unrest in Egypt. Anti-government protests, as they enter their seventh day, have shaken equity markets around the globe and have once again highlighted the fragility of economic confidence. The recent turmoil seen on the streets of Cairo has given investors a welcome opportunity to take money off the table and fuelling a pull-back on most major indices around the globe.

At 9:00 GMT the FTSE was trading at 5822 (-58 points), the DAX at 7040 (-61 points) and the CAC40 at 3957 (-44 points). US futures were also lower, trading at 11735 (-40 points).

UK equity markets were dragged lower by the heavily weighted Mining and Financial sectors, accounting for -11 and -13 points respectively of this morning’s move.

Standard Chartered was trading -19p at 1607, with HSBC -2.3p at 682.5p, both of whom are seen by investors as having more global exposure than the likes of RBS and Lloyds; therefore giving investors reasons to bank, (excuse the pun), any profits whilst the problems in Egypt continue. AHSBC spokesman said their exposure to Egypt was “fairly small” whilst Standard Chartered confirmed theirs was “absolutely minimal.”

Rio Tinto was trading -55p at 4227p, Anglo American -31p at 2999p, with Fresnillo the biggest loser in the sector trading down to a low of 1278p (or -2.9%). The sector seemingly still feeling the pain of being downgraded late last week by analysts at RBS to ‘neutral’ from ‘overweight.’

The positive start to the year has hit a stumbling block in tensions rising from Tunisia, and more recently Egypt, and investors will need reassurance before money will be returned to the market with any great confidence. One may expect either quiet sessions or intra-day sell offs until these issues are resolved or subside. With little ‘market moving data’ out on the macroeconomic front today, only US PPI at 13:30 GMT, investors should stay alert to any advances or escalations to the current situations in Egypt and the Middle East.