KARACHI: The stock market saw nervous investors dump shares leading that saw the KSE-100 index plunge by 403.21 points (1.05 per cent) and close at 38,128.66, which wiped out Rs80bn from the shareholders’ wealth.

The index tumbled in line with the collapse across the world markets as investors freaked out of equities on inverted US treasury yield curve, which in the past nine times had correctly predicted the recession in US. Economists believed that it could signal global economic slowdown in the next 6-18 months.

Sell-off in equity markets was witnessed across Asia, including India’s Sensex, Japan’s Nikkei and China’s Shanghai Composite. Additional pressure was brought to bear on the index as some market strategists anticipated as large as 25-50 basis points hike in the State Bank monetary policy due end of the week.

Investors mostly remained on the sidelines which saw the trading volume of just 56m shares, representing a 14-month low (since December 2017). Traded value also stood at Rs2.7bn, being lowest in 10 months. Major contributors were K-Electric, followed by Bank of Punjab and Bank Alfalah.

The index started off on a negative 12 points and kept sinking before some select buying allowed slight recovery from intraday low by 479 points. Prime minister’s reference to large oil and gas discovery in Indus offshore could not shore up prices of energy scrips.

Conversely, the exploration and production sector was the major drag, which chipped away 98 points from the index as international crude prices fell heavily over the weekend. Other sectors adding to the losses included cement, lower by 64 points, fertiliser 63 points, power 29 points and banks 25 points.

Major contribution to the index decline came from Oil and Gas Development Company, down 1.74pc, Lucky Cement 2.78pc, Pakistan Petroleum 1.30pc, Pakistan Oilfields 1.89pc and Engro Corporation 1.03pc, taking away 139 points. On the flip side, Philip Morris Pakistan gained 4.18pc or 10 points.

Published in Dawn, March 26th, 2019