KARACHI: Stocks took a sharp plunge on Tuesday as the KSE-100 index fell 222.03 points or 0.77 per cent to close at 28,630.12.
The market started on a depressing note over political turmoil and straight away lost 565 points to intra-day low at 28,286.19. However, it managed to cover up some of the losses in second session.
Ovais Ahsan, analyst at JS Global Securities stated that the market lost further ground on Tuesday as the political situation entered a deadlock with both the protesting political parties and the government remaining at loggerheads.
Institutional buying towards the end of the session helped the index recoup some lost ground as the market recovered 343 points from its low to close above the 28,600 mark.
Major decliners were Nestle and Dawood Hercules, both hitting their lower circuit. Flight to safer dividend plays was witnessed as HUBC rallied 2.5pc after announcing a higher cash dividend of Rs4 beating market forecasts of Rs3 per share. The profitability declined by 23pc on the back of higher maintenance cost.
Taha Khan Javed, at Taurus Securities, stated: “While the index has already fallen by nearly 2,000 points from its peak, a state of flux over political clarity will continue to weigh in on the market. Foreign net inflows after peaking in early August have dried up and the foreign funds have also adopted a wait-and-see approach.”
Saad Khan at Arif Habib Limited said that strong macros, healthy corporate profitability, continued interest from the foreign investors and historical precedence, all pointed towards a gradual recovery in the bourse. The political upheaval is coinciding with the corporate result season, strong earnings growth was expected to keep oil & gas, cements and banking sector in the limelight.
Published in Dawn, August 20th, 2014
