Unrest in Egypt affected market sentiment on Monday as investors predicted the impact of the tensions on neighboring countries and world oil supplies.

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Street protests against the regime of President Hosni Mubarak are not expected to be resolved soon. This has led investors to be more wary of risky trades resulting in stocks being traded in narrow ranges. Investors are nervous that the political instability in Egypt may affect oil supplies since the country controls the Suez Canal, a major route for cargo ships and oil tankers.

This has led to the market reacting with the price of Brent crude oil in London rising to almost $100 a barrel while U.S. crude was pegged at about $90 a barrel. Moreover, an increase in oil prices may lead to a jump in inflation rates in other economies.

"The most pressing concern for global markets is the potential for knock-on effects on oil flow if turmoil starts to spread from Egypt across other countries in the region," said Jane Foley, an analyst at Rabobank International.