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Banks, E&P lead index plunge of 1,002 points

Updated December 07, 2018

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Stocks continue to bleed profusely as investors are haunted by “uncertainty” over the government’s plans to restore the ailing economy and stem the slowdown in growth. ─ Online/File
Stocks continue to bleed profusely as investors are haunted by “uncertainty” over the government’s plans to restore the ailing economy and stem the slowdown in growth. ─ Online/File

KARACHI: Stocks continued to bleed profusely on Thursday as investors were haunted by the “uncertainty” over the government’s plans to restore the ailing economy and stem the slowdown in economic growth. The KSE-100 index tanked 1,002.48 points (2.55 per cent) and settled at 38,300.63.

Besides tracking losses in regional markets, the local bourse is still feeling the aftershocks of last week’s double whammy: the sharp hike in policy rates by 150 basis points together with the erosion of rupee value by 3.8pc the same day. Those episodes stoked the bearish flames that are leaping over the stock market for five weeks in a row.

The confusion over who did what and rumours of change of the team of economic managers further spooked investors. Traders said the market was largely at sea over the plans to prop up foreign exchange reserves and manage the fiscal side.

A head of a pharmaceutical firm said the damage to earnings had already been done by massive increase in policy rates and equally astounding depreciation of the rupee in one go.

The sell-off was again led by mutual funds which have dumped stocks worth $19m in the first week of the month.

Despite recent 150bps hike in policy rate, commercial banking was the worst performing sector, dragging the index down by 290 points.

Cement remained under the hammer where big players lost values; oil and gas exploration and production closed in red due to decline in international crude oil prices.

Scrip-wise, major decliners were MCB, down 4.46pc, Pakistan Petroleum 3.10pc, Engro Corporation 3.01pc, Habib Bank 2.57pc and Pakistan State Oil 4.75pc.

Published in Dawn, December 7th, 2018

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