KARACHI: Stocks were badly bruised in the outgoing week when the KSE-100 index sank by 1,128 points (2.9 per cent) — representing the heaviest bleeding in 16 weeks — to settle at 37,522.

Investor sentiments were spoilt by a bagful of bad news. Slow growth of economy during the ongoing year and the year to follow with Asian Development Bank of Pakistan projecting GDP at anaemic 3.9pc; finance minister’s discouraging statements referring to either “going bankrupt or to the International Monetary Fund”; weak macro indicators such as March inflation at 9.41pc, five-year high; and wider fiscal deficit together with further hike in policy rate chased away investors from equities to the safe haven of fixed income certificates.

To add to the investors’ woes, the rupee went into free-fall against the dollar losing 0.2pc of the value in a week, which further fuelled concerns of continued inflationary pressures. The glimmer of hope was the foreign exchange reserves which rose to $17.3 billion ended on March 29, from $15.5bn the previous week.

Foreigners were net sellers of stocks worth $3.7 million against net buying of $0.5m the earlier week as they offloaded equities in fertiliser at $1.6m and power generation $1.6m. On the local front, banks were net buyers of stocks valued at $4.7m while mutual funds were net sellers of $3.2m.

Average daily turnover fell by 7.5pc to 119m shares whereas average daily traded value receded by 20.4pc to $25m.The newly listed Interloop Ltd emerged as a volume leader with turnover of 14.32m shares during its first trading session. Others were Worldcall Telecom at 51.3m shares, K-Electric 39.6m, Maple Leaf Cement 23.9m and Unity Foods 23.5m.

Sector-wise, commercial banks were down 3.8pc due mainly to foreign selling while power dropped 4.9pc and oil marketing companies conceded 5.5pc. Cement fell 2.2pc as a result of decline in international coal prices and news of increase in cement prices in the northern region, fertiliser declined 134 points amid announcement of 100,000 tonnes of urea import and pharmaceuticals lower by 92 points.

Scrip-wise, major losers were Habib Bank, decreasing by 122 points, United Bank 71 points, Pakistan Petroleum 58 points, Engro Corporation 51 points and Pakistan State Oil 47 points.

Going forward, gurus spouted varying views on the market performance. Those disturbed by the heavy bleeding feared further outflows by institutional investors, seeking rising yields on debt instruments which they said could keep investors tamed in the run-up to Ramazan.

Optimists thought that the market may see end to the losses as the expected staff level meeting of IMF was scheduled in Apr. Although many analysts expect further hike in interest rates by 50 bps hike in May and the dollar to settle at Rs147 by June, they said it would help dispel the uncertainty which was the underlying cause of the current market ­meltdown.

Published in Dawn, April 7th, 2019