Authorities rounded up more than 400 people in response to an outbreak of protests against President Abdel Fattah al-Sisi and security forces stepped up their presence in central Cairo, human rights monitors said on Monday.
The blue-chip stock index plunged 4.2%, its lowest since January, with 26 out of 30 stocks on the index seeing a fall. The country's blue-chip index has lost 10.7% so far this week, leaving it with a meagre 1% gain so far this year.
The broader stock index EGX 100 declined 3%, the most since March 2017.
The country's biggest lender Commercial International Bank (COMI) fell 6.3%.
Exchange data showed foreign investors sold a net 776.8 million Egyptian pounds ($47.77 million) of stocks. COMI is a key holding for foreign institutions.
"Today, the selloff was again led by foreigners who were net sellers. They accounted for 27% of the total turnover," said Allen Sandeep, director research at Naeem Holding. "The selloff is coming amid far-fetched speculations that the protests would escalate."
Meanwhile, Saudi's index was up 1.5%, boosted by a 1.3% rise in Al Rajhi Bank, and a 2.8% gain in Riyad Bank.
On Monday, Saudi stocks joined the FTSE Russell index in their fourth of eventual five tranches and the S&P Dow Jones index in the second and final phase.
Petrochemical firms also gained after feedstock supplies from oil giant Saudi Aramco improved. Saudi Basic Industries was up 1.2%, while Rabigh Refining and Petrochemical jumped 4.1%.
In Dubai, the index closed 1.1% lower, pulled down by its top lender Emirates NBD Bank, which dropped 2.3%. Blue-chip developer Emaar Properties lost 1.2%.
A weakening property market in the United Arab Emirates is likely to put more pressure on the asset quality of the banking sector, Fitch Ratings agency said.
Qatar's index traded 0.4% lower with Gulf's biggest lender Qatar National Bank shedding 0.9% and Qatar Insurance down 3.2%.
The Abu Dhabi index traded flat with market heavyweight First Abu Dhabi Bank gaining 0.1%.
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