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KARACHI: Stocks went into free fall on Friday, the last day of rollover week for future contracts with KSE-100 index tumbling 462.07 points (1.09 per cent) to close at 42,074.09.

The uncertainty on the political front with the government and opposition failing to reach consensus on nomination of the caretaker set-up and economic worries sat heavily on the investors’ mind. The massive sale by foreign investors of equity worth $8.01 million a day earlier also caused jitters as the foreign outflow over the last nine sessions topped $44.81m. According to the latest figures released by the National Clearing Company of Pakistan, foreigners slowed down the sell-off to $1.26m.

The heavyweight banking sector, which had bore the brunt of ongoing foreign selling with net outflow of $25.9, showed little enthusiasm on the expected rate rise in the monetary policy statement which was to be unveiled later in the day. Investors also viewed with concern the widening current account deficit and declining foreign exchange reserves.

The market remained unimpressed by the news of currency swap arrangement (CSA) between the State Bank of Pakistan and People’s Bank of China extended for three years increase in the CSA amount.

The volume dwindled to 110m shares, decreasing by 14 pc over the previous day while the average traded value also declined 22pc to reach Rs3.7 billion, pointing to low local institutional participation in blue-chip scrips. Pak Elektron, TRG Pakistan, First Dawood Investment Bank, Bank of Punjab and K-Electric collectively came out as the leaders, contributing 36pc to the total turnover.

Sectors contributing to the index decline included banks, lower by 51 points, cement 49 points, fertiliser 43 points, oil and gas marketing companies 39 points and exploration and production 36 points.

Major laggards were Habib Bank, down 2.32pc, Pakistan Tobacco 5pc, Pakistan State Oil 2.37pc, Hub Power 1.45pc and Lucky Cement 1.40pc, taking away 150 points.

Published in Dawn, May 26th, 2018

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