CAIRO (AP) — Egypt's benchmark stock index plunged 4.4 percent on Tuesday after steadily declining since Russia suspended flights to Egypt following the Oct. 31 Russian plane crash in the Sinai Peninsula.
U.S. and British officials have cited intelligence reports as indicating that the Russian passenger flight from the Sinai resort town of Sharm el-Sheikh to St. Petersburg was likely downed by a bomb on board. All 224 people onboard were killed in the crash, most of them Russian tourists.
Last Wednesday, the U.K. suspended flights to Sharm el-Sheikh and two days later, Russia went a step further, suspending all flights to Egypt amid airport security concerns — a move that threatened to further devastate the Egyptian tourism industry, already suffering after years of political turmoil.
The drop is caused by negative internal and external factors, said Amr Elalfy, global head of research at Mubasher Financial Services.
"Internally, you have the Russian plane, the impacted tourism, and the countries that have suspended flights to Sharm el-Sheikh," said Elalfy.
In addition, the arrest on Sunday of Salah Diab, the largest shareholder of the independent daily Al-Masry Al-Youm who was detained with his son, and also the detention the same day of leading investigative journalist and human rights advocate Hossam Bahgat, also dampened the mood in the market, said Elalfy.
Bahgat's detention prompted an international outcry and statements of concern from the U.S. government and United Nations Secretary-General Ban ki-Moon. Bahgat was released on Tuesday.
Egypt's state-run news agency reported Tuesday that Diab will be jailed for 15 more days pending investigations over accusations of possessing two illegal automatic rifles.
Senior Al-Masry Al-Youm employees told The Associated Press on Monday the accusations and the manner in which he was arrested — by officers in full body armor at the break of dawn in his bedroom — suggests it was "an act of political vengeance."
"Who goes to search one's home at dawn for unlicensed weapons?" asked Omar Hassanein, the newspaper's assistant editor-in-chief.
After his arrest, Diab was photographed handcuffed in front of a police van in a picture that was circulated on social media.
"This is all part of the campaign to silence the media in Egypt," asserted Ihab el-Zalaqani, the paper's managing editor. "Arresting the owner of a big paper may have worked in the 50s, but it won't now. We have the Internet and social media."
"All these things are negative political and economic issues that cast their shadows on the general situation," said Elalfy.
Separately, reserves have been declining over the past few months, leading to a dollar shortage in the country, and making operations more difficult for businesses that rely on imports.
Sharm el-Sheikh is a top tourist destination in the country, and particularly popular among Russians who comprised about a third of all tourists visiting Egypt in 2014. Tourism, one of Egypt's main sources of foreign income, has yet to fully recover following years of unrest after a January 2011 uprising that toppled former President Hosni Mubarak.
Associated Press writer Nour Youssef contributed to this report.