Egypt’s main index tumbled 4 percent to its lowest close since March 17, 2009 after the clashes in Central Cairo and other cities, which pose the biggest security challenge yet for the country’s ruling generals.

“Of course all this is closely linked to the political events taking place as there is confusion and no one can predict what will happen,” said Margo Moussa, analyst at Arab Finance Brokerage. 

EFG Hermes Holding slid 9.9 percent, near the maximum 10 percent allowed. Commercial International Bank tumbled 7.4 percent, Telecom Egypt lost 6 percent and Orascom Telecom dropped 4.9 percent.  

“Usually investors find safety in high liquidity stocks such as blue chips. The shares turning over today are overwhelmingly in retreat,” Moussa said.  

Fears about out-of-control government debt on both sides of the Atlantic swept across financial markets again on Monday, knocking stocks sharply lower.

In Saudi Arabia, banks and petrochemicals dragged the index down 0.9 percent to a four-week low.

“Right now, all eyes are on the euro zone debt crisis,” said Asim Bukhtiar, head of research at Riyad Capital.

“We’re seeing a lot of uncertainty, which is shaking confidence. There is no light at the end of the tunnel.”

Saudi Basic Industries Corp. (SABIC) fell 2.9 percent, and Samba Financial Group lost 0.9 percent. 

Saudi Arabian Fertilizers Co. fell 2.5 percent and National Industrialization lost 2.3 percent.

In Qatar, the index fell 1.4 percent, in its largest one-day decline in seven weeks, to its lowest close since Nov. 2. 

Qatar National Bank and Industries Qatar fell 2.1 and 2.6 percent respectively. 

“I don’t think sentiment change will be the catalyst for the market to move the other way (but) I’d be very surprised if this carries on for more than another day,” said a Doha-based trader who declined to be named.  

“I think it’s a good opportunity for some names to make a clean profit over the next week or so. Where there’s excessive value, investors will shrug off irrelevant distractions.” 

Commercial Bank of Qatar slumped to a three-week low but stabilized, down 1.8 percent.  

“Qatar’s banks are retreating from their recently recorded new highs, in what seems to be a short-term consolidation since their underlying strong fundamentals remain intact,” said Sleiman Aboulhosn, assistant fund manager at Al Masah Capital. 

In the UAE, Dubai’s index fell 0.9 percent to 1,355 points, less than 1.3 percent above its lowest level since 2004.

Abu Dhabi’s benchmark shed 0.4 percent to 2,450 points, less than 1 percent above its lowest level since March 2009. 

Etisalat lost 0.5 percent, First Gulf Bank slipped 1.3 percent and Dubai’s Emaar Properties dropped 1.9 percent.