The army said Adli Mansour will oversee a technocratic government that will prepare the elections but no timetable has been given for the process. His challenge will be to revive Egypt’s faltering economy while maintaining harmony in the deeply-divided nation.
Shares on Egypt’s benchmark EGX 30 index surged 6.4 per cent at Thursday’s opening, its largest jump in more than a year, triggering a suspension of trading. The market continued to rise after trading resumed.
Bond prices rose as traders expressed relief at the largely peaceful removal of the Islamist leader. The yield on the government’s 7-year bond, which moves in the opposite direction to the price, fell 28 basis points to 10.49 per cent.
Mr Mansour said after taking the oath of office that Mohamed Morsi’s ousting was “to correct the path of the glorious revolution . . . and gather the people together without discrimination”.
“It was an expression of the conscience of the nation, the expression of its ambition and aspiration,” he said in a short speech, adding that the “early parliamentary and presidential elections” would be conducted “according to the will of the people”.
“This is the only safe way to a better tomorrow, to more freedom and more justice.”
Mr Mansour described the armed forces, to warm applause, as “the conscience of our nation and fortress of our security”. The military staged a fly-past over central Cairo just before Mr Mansour’s swearing-in.
It is unclear how Mr Morsi’s supporters will react to Mr Mansour’s appointment since their leader was removed after just twelve months in office. Violent clashes overnight between Mr Morsi’s supporters and opponents claimed the lives of 10 people.
A spokesman for Mr Morsi’s Muslim Brotherhood organisation, Gehad al-Haddad, told the Reuters news agency on Thursday that the ousted president was being held at the defence ministry.
Senior Brotherhood leaders were arrested, including Saad El-Katatni, head of the Brotherhood’s Freedom and Justice Party and former speaker of parliament, and Rashad al-Bayoumi, one of the Brotherhood’s deputy leaders, the Mena state news agency reported.
Prosecutors have also issued warrants for Mohamed Badie, the head of the Brotherhood, and his deputy, Khairat al-Shater, Reuters reported.
Twelve presidential aides were detained at the Republican Guard barracks where Mr Morsi had been living and three television stations went off the air, including one owned by the Brotherhood.
The removal of the Islamist leader and suspension was confirmed in an address on state television on Wednesday night by General Abdel Fattah al-Sisi, the defence minister.
The National Salvation Front, a loose grouping of liberal and secular activists that has been prominent in the street protests that triggered Mr Morsi’s ousting, claimed in a statement that what took place was not a coup.
“It was a necessary decision that the armed forces’ leadership took to protect democracy, maintain the country’s unity and integrity, restore stability and get back on track towards achieving the goals of the 25 January  Revolution,” it said, adding that it was confident the military’s role “would remain . . . a national one and not political”.
US President Barack Obama said he was “deeply concerned” by events in Egypt. “I now call on the Egyptian military to move quickly and responsibly to return full authority back to a democratically elected civilian government as soon as possible,” he said in a statement released by the White House.
The United Arab Emirates, one of the Brotherhood’s most outspoken Arab critics, noted its “satisfaction” at Mr Morsi’s ousting, according to the official WAM news agency, while Saudi Arabia sent a congratulatory message to Mr Mansour.
Qatar had been Mr Morsi’s main regional supporter.
The end of the Morsi presidency at the hands of the military elicited roars of approval from tens of thousands of protesters flooding Tahrir Square, where fireworks erupted in celebration.
Mohamed al-Sayeed Ibrahim, a 24-year-old employee at the electricity ministry from Cairo’s Boulaq district, said he had voted for Mr Morsi in presidential elections but now regretted it.
“We left the square but we came back, and if he comes back, we will too,” he said, amid the jubilation in Tahrir Square. “I’m never voting for Islamists again. I’m voting for those who have the interests of the people in mind, and they don’t.”
Before his detention Mr Morsi had rejected the military’s intervention. In a statement on his Facebook page, he called on all citizens, civilians and members of the military to adhere to the constitution and reject what he described as a coup.
He later appeared, in shaky video footage broadcast on the Al Jazeera television channel, and insisted that he was still the president and said he was prepared to hold talks with the opposition ahead of parliamentary elections.
Although this was clearly a rallying call for supporters signalling a determination to resist the military’s move, he also warned against violence.
“I call on you to preserve blood and to avoid falling into the swamp of infighting, because if that happens the nation would be exposed to great danger,” he said.
Egyptian police subsequently stormed the station’s Cairo offices and arrested staff.
The state news agency later reported that security forces had arrested the Muslim Brotherhood party leader Saad El-Katatni and his deputy Rashad alBayoumi.
The military’s move back into politics came two-and-a-half years after the popular uprising that led to the ousting of longtime ruler Hosni Mubarak and less than a year after the generals handed power to a civilian president.
The army ousted Mr Morsi after a 48-hour ultimatum demanding that he reach an agreement with his opponents expired. Mr Morsi’s aides remained defiant throughout the day, insisting that he was the elected and legitimate president and warning of the dangers of a military coup.
Mr Obama stopped short of using the word “coup”, which could require the US to suspend the $1.5bn in economic and military assistance it gives each year to Egypt. However, he said that the US government would “review the implications under US law” of assistance given to Egypt.
Mr Morsi’s aides had vowed that they would refuse to submit to any political plan outside of the country’s legal framework with some warning that a coup could result in violence.
The military intervention in effect sweeps away two parliamentary elections, two constitutional referendums and a presidential election that were held since Mr Mubarak’s toppling, and pushes Egypt’s political timeline back to February 12 2011, the day after the former president’s departure.
But Mohamed ElBaradei, the opposition leader and head of the Dustour party, who was among those present at Gen Sisi’s press conference, said he hoped the road map would be “a stepping stone for a new launch of the January 25  revolution”.