KARACHI: Stocks remained under pressure for the fourth successive day with the KSE-100 index retreating another 170.72 points (0.42 per cent) to close at a 30-session low of 40,684.05 points.
The market got off to a firm start as investors were lured by attractive valuations to reach an intraday high by 73 points but all hell broke loose and index hit intraday low of 486 points.
Market participants were spooked by the possible outcome of Economic Coordination Committee (ECC) meeting which was set to decide regarding gas allocation to fertiliser companies, import of urea and the hefty increase in gas tariff.
A bounce back was witnessed later in energy-intensive stocks after the meeting could not finalise a hike in gas tariffs but some were baffled by the decision. Others also noted with concern the indecisiveness in preparing a road map to handle critical issues such as the drawdown on foreign exchange reserves and the burgeoning circular debt.
With no end to the uncertainty over the pressing economic issues, investors decided to stay on the sidelines. As a result, volume dropped by 7pc over the previous session to 113 million shares while traded value declined 9pc to Rs4.21 billion. Leaders were Unity Foods, Fauji Foods, TRG Pakistan, Engro Polymer and Chemicals and Fauji Cement, representing 29pc of the total turnover.
Sector-wise banking scrips were the major casualty which contributed a loss of 133 points. The big five banks wiped off 92 points from the index with Habib Bank down 2.5pc, Allied Bank 2.3pc, MCB 0.8pc, National Bank 0.53pc and United Bank 0.49pc. Other loss yielding sectors included tobacco, decreasing by 31 points, oil and gas marketing companies 25 points, power 18 points and cement 15 points.
Going forward, analysts reckoned a further downside, if tough decisions to replenish reserves and rein in the twin deficits were further delayed. A cautious move and liquidation of short-term positions on strength seemed to be the prudent strategy.
Published in Dawn, September 11th, 2018