Violence in Egypt took a turn for the worse as Police Storm Pro-Mursi Camps.

Egypt’s security forces stormed two sit-ins in Cairo where Islamist supporters of former President Mohamed Mursi have been protesting his overthrow. Bursts of gunfire rang out, and reports of casualties varied widely.

At least 15 people were confirmed dead as security forces moved into the camps at Rabaa and Nahda in the capital, according to Mohamed Sultan, head of the ambulance authority. State TV said the casualties included five police. An e-mailed claim, which couldn’t be independently verified, from a Muslim Brotherhood-led alliance that backs Mursi said more than 2,200 protesters were killed at Rabaa alone.

Image from  El Watan/EPA

Protesters’ tents burn as Egyptian security forces move in to clear one of the two sit-in sites of supporters of ousted president Morsi, near Rabaa Adawiya mosque, in Cairo, Egypt, on August 14, 2013.

“What happened isn’t the end of instability,” Ziad Akl, a senior analyst with Cairo-based Al Ahram Centre for Political and Strategic Studies. “Dispersing the sit-in just means the Muslim Brotherhood will seek other ways to protest and put pressure on the government.”

Economic Picture ‘Hideous’

“The economic picture remains hideous by any standards,” said Crispin Hawes, head of the Middle East program at the New York-based Eurasia Group, which monitors political risk. “One of the major pillars of the Egyptian economy is tourism. The longer that the violence goes on, the longer it will take for Egypt to recover the type of tourism revenues it was generating before the revolution in 2011. It has all the potential for a major disaster, so much can go wrong.”

Stocks Lower, Market Closed Until August 18

Bloomberg reports Egyptian Stocks Lower, Bourse Closed.

All but two stocks on the index fell as police stormed the camps at Rabaa and Nahda in the capital, where Mursi supporters have congregated since he was overthrown by the military last month. The death toll reported by the Health Ministry was disputed by the Muslim Brotherhood, which claims hundreds were killed by security forces. The group and its allies had vowed to maintain demonstrations until Mursi is restored to office.

“The biggest concern is things on the streets may be getting out of hand and no one knows what the consequences will be,” said Ashraf Akhnoukh, Cairo-based manager for Middle East and North Africa markets at Commercial International Brokerage Co. “For investors, it’s unclear whether this operation can be completed today or if it will be protracted into a street battle that results in a state of emergency or a curfew.”

Bourse Closing

The bourse’s decision to close tomorrow is the first since January 2011, the start of the revolt against former President Hosni Mubarak, when trading was suspended for almost two months. Trading will resume Aug. 18, the bourse said in a statement.

‘Much Worse’

“We now believe that things in Egypt have the strong potential of getting much worse, pushing through the positive aura that has comforted local investors hoping of a business-friendly environment and no MB in combination with pressured fundamentals,” Emad Mostaque, a strategist at Noah Capital Markets, said in the e-mailed note.

Mike “Mish” Shedlock