The Slatest

Egypt’s Stocks Tumble as Protests Over Morsi Decree Continue

An Egyptian protester holds a tear gas canister during clashes with Egytptian riot police in Tahrir Square on Sunday

Photo by AFP/Getty Images

Egypt’s benchmark stock index plunged 9.6 percent on Sunday, the biggest drop since January 2011, illustrating how the unrest that has taken hold of the country is spreading into the economy and decimating hope that stability could be quickly restored, reports Bloomberg. Protests against President Mohammed Morsi’s decree that essentially gave himself almost absolute power without oversight from the judiciary continued on Sunday. Riot police fired tear gas at protesters in the iconic Tahrir Square in Cairo, a reminder of the revolution that toppled Hosni Mubarak in February 2011, notes Reuters.

Several dozen protesters are now refusing to leave Tahrir until Morsi rescinds the decree, reports the Associated Press. The clashes of recent days are seen as a preview of what the country can expect Tuesday, when both sides have called for big demonstrations. Anger continues to grow, particularly because the brutality shown by police officers against protesters appears to rival what was seen in the Mubarak days. “Appalling police brutality against demonstrators continues unabated,” Nobel peace laureate Mohamed ElBaradei wrote on Twitter. “Mubarak’s repressive regime alive and well.”

Analysts caution that if Morsi doesn’t manage to quickly defuse the situation he could have a bigger governability problem in his hands. He may have unwittingly given a gift to the opposition, helping secularists and youth groups unite under one banner, something they haven’t been able to do since Mubarak’s ouster, notes Bloomberg.

Sunday’s stock market plunge illustrates how Egypt’s deep political divisions will undoubtedly hurt its still-ailing economy. The plunge will have “a lot of impact on other economic indicators,” such as tourism and foreign investment, a Cairo financial analyst tells Al Jazeera. Trading in the stock market was suspended for 30 minutes as shares plunged, but the drops continued as soon as trading resumed.