More than 1,000 Egyptians extended a protest in central Cairo to a fifth day on Tuesday after dismissing the prime minister's pledge to reshuffle the Cabinet as falling short of demands for swifter reforms.
"It will continue to weigh on the market, which is totally dependant on what's going on in the street," said Hashem Ghoneim of Pyramids Capital. "If the protests escalate in Tahrir (Square) the market will be pressured to go down even more."
Cairo's benchmark index lost 2.8 percent to end at its lowest close since May 10 at 4,972 points.
Commercial International Bank, the most active stock, fell 4 percent and the exchange suspended 22 shares from trade during the day after their declines surpassed 5 percent.
Only six companies on the index gained, including two dollar-denominated stocks, Maridive and Oil Services, which added 2.6 percent, and Egypt Kuwait Holding, which rose 1.7 percent.
Investors dumped the euro and stocks for a third day on Tuesday as concern mounted that the euro zone debt crisis was spreading to Italy and Spain.
Global concerns overshadowed strong bank results in Saudi Arabia, dragging the Kingdom's Tadawul All-Share Index (TASI) 1.2 percent lower to 6,490.23 points — its lowest close since June 25.
"The euro debt issue is hanging on everyone's mind, and the regional sentiments is already weak because market participation is thin, on seasonality impact," said a Saudi-based fund manager who declined to be named.
Petrochemical and banking stocks, the two heavyweights on the index, fell and investors reduced positions across the board.
Saudi Basic Industries Corp. (SABIC), the world's biggest petrochemical firm by market value, fell 1.2 percent. The biggest listed Saudi lender, Al-Rajhi Bank, shed 1 percent despite posting a 3.6 percent rise in quarterly earnings.
Saudi Hollandi Bank bucked the trend, gaining 1 percent after reporting a 5.1 percent rise in quarterly profit, beating forecasts.
Dubai shares declined for a second day, with the global sentiment doing little to help sentiment, and Qatar's market also ended lower. Qatar's index fell 0.9 percent to 8,425 points — its lowest close since June 30.
Dubai's index declined 1 percent to 1,533 points, hitting a fresh July low. Most stocks fell, with Emaar Properties down 2 percent.
Analysts polled by Reuters estimate the developer to post a 55.3 percent drop in quarterly net profit.
"Emaar would be interesting in my opinion -- the headline number will probably not look pretty most probably due to some write-offs, but I would look at the operating side," said Ibrahim Masood, senior investment officer at Mashreq bank.
The Omani index eased 0.3 percent to 5,968 points. The Kuwaiti measure eased 0.3 percent to 6,165 points.
The Bahrain measure eased 0.05 percent to 1,318 points.
