CAIRO Egyptian President Hosni Mubarak looked likely to step down on Thursday in response to more than two weeks of nationwide protests against his 30-year rule and the news provoked loud and emotional cheers in Tahrir Square.
Below is reaction from analysts and economists.
MICHAEL GANSKE, HEAD OF EMERGING MARKETS RESEARCH, COMMERZBANK LONDON
"The markets will react positively, this gives some clarity regarding the path going forward. The risk was in Mubarak trying to keep his position and trying to establish a new framework, then there would once more be demonstrations and violence escalating.
"International support will keep Egypt stable, that should mean risk premiums coming down."
JOE BATTIPAGLIA, MARKET STRATEGIST, STIFEL NICOLAUS, YARDLEY, PENNSYLVANIA
"It should come as welcome news to markets that the street rebellion could come to an end and the government could move into a transition. The critical factor is that the military remains in control of the streets and social order while the transition in undertaken.
"I don't think (any reaction) can be stock specific. The market sold off on the news of the growing tensions in Egypt pretty much across the board.
"The emerging market story is not dependent on an outcome in Egypt but certainly having stability there and less of a threat of interruptions in pipelines (is positive) that's where that development comes in.
JULIEN BARNES-DACEY, MIDDLE EAST ANALYST, CONTROL RISKS
"I think a lot of businesses will breathe a sigh of relief if Mubarak goes, hoping that it will bring calm. The rumbles from Egypt and Tunisia will be heard around the world for several years to come, but I don't see an immediate domino effect toppling other regimes."
ANTHONY SKINNER, ASSOCIATE DIRECTOR, MAPLECROFT POLITICAL RISK CONSULTANCY
"In the best case scenario, Suleiman would take over and there would be an accelerated transition to democracy. In a worst-case scenario, this turns into effectively a military coup and the military prove not keen on a transition to democracy.
ROB MONTEFUSCO, SUCDEN FINANCIAL
"A bit of the premium has come out of the oil markets... Obviously, if it's a peaceful stepdown and anarchy stops on the streets, it will completely ease fears of any remote possibility that the Suez Canal was ever going to be disrupted, so consequently you see the market ease a little bit."
TOM BENTZ, BROKER AT BNP PARIBAS COMMODITY FUTURES INC IN NEW YORK.
"Since Brent (oil) had the biggest rally due to events in Egypt I would expect that it could be the one to fall the hardest from a Mubarak departure."
PHIL FLYNN, OIL ANALYST, PFGBEST RESEARCH, CHICAGO:
"The initial reaction will be a sell-off on Brent (oil) and the Brent/WTI spread. And you will see NYMEX crude recover here as jitters about the Suez Canal may subside. After the initial reaction, however, people will then watch for where any next uprising in the Middle East or North Africa will be."
BRUCE DUNN, VICE PRESIDENT OF TRADING, AURAMET TRADING LLC, FORT LEE, NEW JERSEY:
"Gold is just struggling. It appears that the tension in Egypt has eased a bit, so maybe that's why the price of gold has come off."
"If you didn't have the Egyptian crisis, gold would be below $1,300. Even with the Egyptian crisis, we were trading at $1,310 (in late January) and barely holding onto those levels."
"I just think that bullion investors are getting nervous, and some of the economic news has been more robust than people had anticipated."
DINA AHMAD, EMERGING MARKETS STRATEGIST, BNP PARIBAS, LONDON
"I do not know if there will necessarily be a positive reaction in the markets. The protests may die down and there will be a return to some sort of normalcy but we will still have a period of uncertainty ahead, whether or not he does step down."
JOSEPH TREVISANI, CHIEF MARKET ANALYST, FX SOLUTIONS, SADDLE RIVER, NEW JERSEY:
"You would expect to see some dollar strength from the resignation, if it happens, of President Hosni Mubarak as it will most likely raise political instability in Egypt and the Middle East."
LUIS COSTA, DIRECTOR, CEEMEA STRATEGY, CITI, LONDON
"The headlines establish that Mubarak must leave...It creates a vacuum of leadership on both sides, not just on the opposition, but also on the government.
"We should see the indecision and uncertainty continue ... The government has opened the gates to a transitional period that could be long.
"At this point the market is trying to grasp what's going on ... The shekel has risen (against the dollar) so the first market reaction looks to be welcoming the move."
TIM ASH, HEAD OF CEEMEA RESEARCH, RBS:
"In short-term, Mubarak's departure would stabilise the situation but uncertainties remain. We still don't know what the process of constitutional reform will look like, what the elections will throw up. The stock market's been closed for so long that it's difficult to figure out what's priced in. There may be a bit of rally when it opens. I suspect people have generally bought into the best case scenario. Egyptian bonds have rallied back but this could have been due to expectations that Mubarak was going to stay around to manage the transition.
GABRIEL STERNE, SENIOR ECONOMIST AT EXOTIX
"This will be the most significant announcement to date if shown to be true. But it's not the final word because if Suleiman tried to cement his long term position and went into elections that weren't as free and fair as guaranteed, that may not be enough to keep the protesters away.
"This may get people off the streets but it may not be enough to keep them off the streets.
ALEC YOUNG, EQUITY STRATEGIST AT S&P EQUITY RESEARCH IN NEW YORK
"From a market point of view, stability is what is most paramount. The fact that he's leaving is fine, but you want to make sure there's an orderly transition to a government that has control of the situation."
CARL LARRY, PRESIDENT, OIL OUTLOOKS, HOUSTON, TEXAS
"The risk to the oil markets comes as to who the successor to Mubarak will be.
"I think the idea behind the regime change is to see more money distributed to the poor. This probably means higher fees for all commodities passed through (Suez Canal, pipeline)... the worst case is that you get someone who is totally anti-American and raises prices on a higher scale than other counterparties."
MICHAEL HANNA FROM THE CENTURY FOUNDATION ON HIS TWITTER FEED; TWITTER.COM/MWHANNA1
"Will people be satisfied under mil rule? This could create splits among the opposition, and that is probably what the army is hoping for"
"Is this to head off real transition + consolidate power within mil state? Demands should focus on civilian national unity gov for transition"
(Reporting by Reuters correspondents, editing by Diana Abdallah)