KARACHI: The stock market bear was on the prowl for the second consecutive day, dragging the KSE-100 index down by 544.52 points (1.40 per cent) to close at 38,307.44.
Investors’ confidence was at a low ebb as they feared an economic slowdown and surging inflation in the aftermath of recent rupee depreciation and higher than expected interest rate hike. Uncertainty over the negotiations with the International Monetary Fund further kept the market in suspense.
Traders also worried over the upcoming FTSE rebalancing which many thought could have negative repercussions on banking stocks. As a result, the sector was the major laggard and wiped out 99 points from the index as heavyweights closed in the red.
At midday, the benchmark caved in by intraday low of 722 points as the Sui Southern Gas Company announced gas supply outage to the captive power plants of all industries and CNG stations, except zero-rated and rice export industries. Investors panicked as they viewed it as a signal of shortage of natural gas that would be a bad omen for the chemicals, cement, fertiliser and steel sectors.
Moreover, foreign investors dumped stocks worth $3.39 million, taking the month-to-date outflow at $12.18m.
The latest sell-off was thought to be fuelled by US adding Pakistan and some other nations to the blacklist for alleged religious freedom violations. However, US State Department later announced exemption for Pakistan, Saudi Arabia and Tajikistan, but it failed to impress investors.
Traded volume improved 17pc to 145m shares while the traded value was also up 17pc to Rs124 billion. Small cap stocks contributed 36pc to total turnover. Major decliners were Habib Bank, down 2.85pc, United Bank 2.77pc, Engro Corporation 1.79pc, MCB 1.63pc and Oil and Gas Development Company 1.42pc.
Published in Dawn, December 13th, 2018
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