KSE index plunges by 3.36pc, turnover at record low
By Out Staff Reporter
KARACHI, Oct 8: Karachi stocks reopened in a terribly bad mood on Monday as the reports of US and allied attacks on Afghanistan and its possible negative fallout here generated nervous selling from all the quarters but circuit breaker limited the market decline. Trading volume fell to a record low of 17 million shares as KSE index plunged by 3.36 per cent.
“Preceded by a sustained anti-Taliban media campaign, the inevitable has at last happened after the major Afghan cities witnessed the US firepower and innocent killings”, one broker commenting on Sunday’s US and allied attacks on Afghanistan said.
The war next door could convey different messages to close or frontline neighbours but what could be more disturbing for them is its multi-dimensional fallout including the sympathetic civil unrest, he adds.
Although there were rumours that the market may temporarily be closed to protect the small savers’ interest, leading analysts think in the presence of circuit breaker the possibility of the extreme step appears to be remote at least for the near-term. The high-ups of the stocks exchanges have already taken some corrective steps including the five-per cent circuit breaker, which does not allow five per cent either-way price movements in a session.
An idea of panic followed by overnight air strikes by the US on major Afghan cities may well be had from the fact that there was no trace of the last week’s run and the KSE 100-share reopened with a fall of 30 points and ended off 38.29 points or 3.36 per cent at 1,102.91 as compared to 1,141.20 at the last weekend.
However, larger fall was averted as the notorious circuit breaker was there to check the market’s fall below the permissible limits. What the most shrewd investors did was to keep off until clearer picture about the Afghan situation emerges as was reflected by an all-time single session volume of 17 million shares. It was below the previous record low of 23 million shares.
What seems to have blurred investor perceptions about the direction of the market at least for the near-term was reports of violent public reaction to the allied air strikes on major cities of Afghanistan, says a leading floor broker.
The market should have not reacted that violently to the attacks as it has shown a smart recovery in the preceding week, which the brokers, called, its resolve to discount any major negative impact on its inherent strength, they added.
But stock analysts at the W.E. Financial Services believe it perhaps was a great divide between the official and the public perceptions about the fallout of the Afghan war on the local public.
“Essentially, the market appears to have been weighed down by the fears of local civil unrest rather than the outcome of war as the officials fail to sell the idea of allied benefits of cooperation with the US to the general public”, they add.
Minus signs dominated list as all the blue chips finished with sharp fall without matching ready business. Central Insurance, PSO, Pakistan Oilfields, Shell Pakistan, Al-Ghazi Tractors, BOC Pakistan, Dawood Hercules, Engro Chemical, Glaxo-Welcome and Lever Brothers were leading among them, off by Rs.2.00 to 24.00.
Gains on the other hand were fractional barring Knoll Pharma and IGI Insurance, which rose by one rupee to Rs.3.00.
As there were more sellers than buyers, trading volume fell to a record low of 17 million shares as losers forced a strong lead over the gainers at 86 to 16, out of 116 actives.
PTCL led the list of actives, off 70 paisa at Rs.13.50 on 6 million shares, Fuaji Fertiliser, lower Rs.1.05 at Rs.33.90 on 4 million shares, Hub-Power, easy 65 paisa at Rs.13.00 on 3 million shares, PSO, sharply lower by Rs.5.10 at Rs.97.45 on 0.590 million shares and Engro Chemical, down Rs.2.30 at Rs.44.50 on 0.555 million shares.
FUTURE CONTRACTS: In sympathy with steep decline in the ready section, PSO also came in for an identical battering in the forward counter too and finished with a sharp decline of Rs.5.20 at Rs.97.70 on 31,500 shares.
MCB, ICI Pakistan and Engro Chemical followed it, off Rs.1.10, 1.45 and 2.40 at Rs.19.80, 28.50 and 44.30 in that order were leading losers amid light trading.
Hub-Power and PTCL were volume leaders, off 75 paisa and 80 paisa at Rs. 12.90 and 13.45 on 0.0867 million and 1.668 million shares respectively. All others were also traded lower.
DEFAULTER COMPANIES: Trading activity on this counter was slow as shares of only two companies, Allied Motors and Suzuki Motorcycle came in for modest support at the lower levels at Rs.290 and 0.90 respectively on 500 shares each.
