KARACHI: Stocks fell for the second consecutive day on Monday as the benchmark KSE-100 index was down 321.96 points (0.65 per cent) to close once again below the 49,000 level.

Market participants attributed the downturn to “correction” and ‘profit-taking”. Several traders and analysts, however, perceived it a dampener on investor confidence after the SECP directive to the local mutual funds, requiring them to maintain at least 5pc of the net assets in cash. “Many see it as a step that may slow down the buying momentum of the local mutual funds industry.”

The market began on a firm note, carrying the KSE-100 index up by 185 points, but the selling pressure soon took hold, which witnessed the index plunge by over 400 points within the first hour. Buying at dips lifted the index from its intra-day lows.

Heavyweight stocks inclu­ding banks and oil exploration companies declined amid profit-taking by investors. United Bank fell 4.49pc, Habib Bank 2.26pc, MCB Bank 2.06pc, National Bank of Pakistan 2.36pc and Bank Al Habib 2.23pc, taking away 266 points in aggregate.

The fertiliser sector outperformed the broader market after the government revoked its earlier decision of withdrawing cash subsidy to the sector. Fauji Fertiliser rose 0.50pc, Engro Corpo­ra­tion 0.75pc, Engro Fertili­sers 1.15pc and Fauji Ferti­liser Bin Qasim Ltd 1.25pc.

Falling global oil prices forced investors to trim their holdings in oil and gas exploration companies. Pak­istan Oilfields was down 1.10pc, Oil and Gas Deve­lop­ment Company 0.43pc, Pak­is­tan Petroleum 0.71pc, Pak­istan State Oil 1.21pc, Has­col Petroleum 0.72pc and Shell Pakistan dropped 0.43pc.

The steel sector also faced selling pressure despite steel rebar future prices shooting up to 3,300 yuan a tonne as investors booked profit after recent heavy gains.

Published in Dawn, January 17th, 2017