KARACHI: Bears managed to drive away the bulls after two sessions, knocking down the KSE-100 index by 412.06 points (1.06 per cent) to close at 38,552.95. Market reversed its direction on Thursday after heavy sell-off by investors who were spooked by negative news flow.
There were subtle hints of a possible downgrade of Pakistan Index from MSCI Emerging market, back in to Frontier market, which was feared to intensify foreign outflows. Moreover, a delegation of the Asia-Pacific Group on money laundering expressed serious reservations over insufficient physical actions on ground against proscribed organisations to block flow of funds and activities; it was likely to issue a formal warning before its departure later in the day.
The investors’ concerns were exacerbated by expectations of rate hike ranging between 50-75 basis points in upcoming monetary policy to be announced by the central bank on Friday. The International Monetary Fund bailout program including possible rise in electricity and gas tariff, was thought to be a further drag on cost of sales.
The index started out in the negative territory and sank to intraday low by 546 points before regaining a bit at the end of the session. While banking sector, a major beneficiary of rate hike, saw gains in selected scrips whereas highly leveraged sectors, such as steels, cements and chemicals were down expecting cost pressures.
Volumes fell to 131.8 million shares as against 228.7m yesterday (down 42pc day-on-day). Average traded value also declined by 29pc to reach $31.2m as against $43.9m. Unity Food’s right shares accounted for the heaviest traded shares — for the second day — at 43m measuring up to 33pc of the aggregate volume.
Major contribution to the 100 index downside came from Pakistan Petroleum Ltd down 2.96pc, Oil and Gas Development Company 2.32pc, Lucky Cement 3.05pc, United Bank Ltd 2pc and Habib Bank Ltd 1.02pc taking away 201 points.
On the flip side, Bank Al Habib Ltd was up 0.91pc, Meezan Bank Ltd 1.78pc and Millat Tractors Ltd 2.15pc added 31 points.
Published in Dawn, March 29th, 2019