CAIRO, May 27 (Reuters) - Egypt's main stock index was virtually unchanged on Wednesday, with sharp declines in Orascom Telecom and Mobinil offset by continued strength in construction and banking stocks.
The two telecom firms were buffeted by news that the Capital Markets Authority had rejected France Telecom's improved bid for Mobinil, with Orascom ending 5.49 percent lower at 33.75 Egyptian pounds ($6) and Mobinil shedding 4.78 percent to 190 pounds.
"(The rejection of the offer) is going to put some negative sentiment on the whole market," said Hashem Ghoneim, vice chairman of Pyramids Capital. "It could be short term. I don't think it will last too long," he added.
Shares in the two firms had been suspended from trade since May 19, pending the regulator's decision.
Construction stocks made strong gains, with heavyweight stock Orascom Construction Industries (OCI) keeping the market afloat, gaining 3.17 percent to 211 pounds.
"The index didn't turn into the negative mostly because of OCI," said Noha Samir from Delta Rasmala Securities.
Sixth of October Development and Investment (SODIC) gained for a fourth straight session, up 3.97 percent to 59.98 pounds.
"Construction and real estate have been working quite fine. Real estate is one of the first sectors to rebound," Samir said. ($1 = 5.6218 Egyptian pounds) (Writing by Alastair Sharp)