— File photo
— File photo

KARACHI: Selling intensified at the Karachi stock market on Monday with red splattered all across the board.

By the close of trading, the KSE-100 index had plunged by 436.17 points or 1.97 per cent to 21,724.68.

With lone greens here and there, the declining stocks at 288, outnumbered the mere 45 gainers, by a margin of six-to-one.

Market capitalisation eroded by Rs97 billion on Monday to close at Rs5.417 trillion.

Although the stocks had suffered sharp pull back in the last two trading days, Thursday and Friday, most investors were shocked to see the stock prices cave in just at the start of trading on Monday.

Improvement in Asian and most developed markets were thought to be an indication that the scare over imminent Syrian war had died down.

Yet investors’ confidence was shattered by early selling in heavy-weight oil and gas and banking sector.

More than a dozen stocks hit the ’lower circuit’. Those included Dawood Hercules; Efoods; Maple Leaf Cement; Adamjee Insurance and Treet Corporation.

The fall in index heavyweight OGDC which closed 1.6pc down; MCB which lost 3.4pc; PSO that dipped by Rs11; POL lower by Rs10 and Attock Petroleum that dived by Rs12.59, sealed the fate of the market.

The investors’ sentiment had received a jolt due to lower-than-expected financial results in the banking and oil and gas sector.

Thus the index start a 22,160.85 was the highest for the day while the closing was only a little up from the day’s low at 21,677.37 points.

Although investors’ feared that it could spell further slide, the redeeming factor was the turnover, which had already declined further to 180 million shares of the trading value at Rs5.715 billion, from 185 million shares valued at Rs6.635bn last Friday.

A couple of major brokers said that the approval of IMF funding early this month and Monetary Policy Statement (MPS) of the State Bank of Pakistan on Sept 13, were the key drivers.

Investor sentiments were further dampened by the high August CPI (Consumer Price Index) numbers released on Monday which showed a spike to 11-months high at 8.55pc, compared to 8.26pc the previous month.

Analysts stated that the banking sector was among the key losers with MCB down 3.9pc; NBP lower by 1.8pc and BOP hitting the lower circuit with fall of 5.9pc.

Oil & gas sector stocks also suffered pruning despite the recent run-up in international oil prices.

PTC was among the few stocks that managed to float in the green, closing 0.5pc up, after the news of Supreme Court ordering the appointment of chairman and other members for Pakistan Telecommunication Authority (PTA) in the next 15 days before proceeding with the 3G auction.

Some analysts pointed out that the settlement obligation of the brokers in Deliverable Future Contracts would be done on Tuesday.

Voices of a few market participants who were talking of default in payment obligation would be silenced as the settlement was thought to proceed smoothly.

The KSE-had already shed 7pc including 5pc in Aug. Yet, invesotrs had taken heart and were comforted by the fact that against accumulated outflow of $2.722bn from the regional markets in August, the Pakistan equities had observed inflow of $28 million.

Foreign outflow on Monday amounted to $2.15m which was another worrisome news for the market. However, it was good to see that the offloading by foreign funds was quickly absorbed by local participants.


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