Egypt stocks slide 2.5% on political bloodshed

Ozan Kose | AFP | Getty Images

A woman protestor chants slogans in front of a poster of Egypt's ousted president Mohamed Morsi during a demonstration condemning the recent deadly military crackdown on pro-Morsi protesters in Cairo Saturday.

Egypt's stock market fell sharply on Sunday as it resumed trading after hundreds of people were killed in a crackdown by the army-backed government on supporters of the Muslim Brotherhood.

Cairo's main equities index was down 2.5 percent in the opening minutes to 5,410 points. It fell 1.7 percent last Wednesday, before the market was shut on Thursday because of the violence. Sunday's trading day will be shortened to three hours from four to give exchange employees time to obey a curfew.

(Read more: Scenes from the turmoil in Egypt)

The index fell below ajor technical support around 5,450 points, where it peaked in May and July.

In addition to the bloodshed, the government has threatened to ban the Brotherhood, which could end remaining hopes for inclusive parliamentary elections and a return to civilian rule in coming months.

(Read more: Egypt's cabinet to decide fate of Muslim Brotherhood)

"As long as we have bloodshed on the streets, it takes away any reason for foreign and regional investors to buy in Egypt," said Amer Khan, director at Shuaa Asset Management in Dubai.

(Read more: Rising oil prices, is it really just about Egypt?)

"There are many opportunities in the Egyptian market but you need economic clarity for these opportunities to be attractive."