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CAIRO/DUBAI - Egypt's stock index suffered its largest decline in 14 months yesterday, a day after anti-government protests rocked the country.

Cairo's benchmark CASE 30 index fell 6.1%, its biggest drop since November 30, 2009, slumping to a five-month low.

"It is the fear of the unknown," investment and capital market analyst Nader Khedr told Reuters. "Of course the big caps will be highly affected because they have foreign interest."

Seventeen stocks made double-digit declines, including investment bank EFG-Hermes, mobile telephone operator Mobinil and Ezz Steel.

The Egyptian pound tumbled to near six-year lows.

Egypt said yesterday it was banning demonstrations and quickly dispersed protesters who tried to gather, seeking to halt unprecedented protests against 82-year-old President Hosni Mubarak's 30-year rule.

"We downgraded Egypt to neutral from overweight last week but in retrospect, underweight would not have been a bad idea," said Robert Ruttman, emerging equity strategist at Credit Suisse in Zurich.

"Longer-term these are the growing pains of evolution to democracy in North Africa. But short term it won't be pretty," he said.

Egypt's stock market has lost more than 11% since the start of the year, while the pound is down 0.4% due to knock-on effects of the protests in Tunisia that ended the 23-year rule of President Zine al-Abidine Ben Ali.

Analysts expect more weakness ahead for the financial markets - Citi director for CEEMEA debt and FX strategy Luis Costa said Citi had observed ouflows of $150 million at least from the Egyptian local bond markets yesterday, which had helped push the pound down.

Egypt is one of only three African markets included in the MSCI emerging benchmark index but comprises only 0.45% of it. Emerging equities in general and Gulf stock markets in particular appeared to have been little affected by the Egyptian rout.