KARACHI: The stocks slumped on Tuesday with the KSE-100 index sinking 748.09 points (2.10 per cent) to close at 34,949.28. It represented the first major decline after 10 sessions of upward drive that had seen the index gain 7.65pc and indications that the bulls had tried out was provided by the flat closing witnessed a day earlier.
A host of factors were responsible for the loss of investors’ confidence which included MSCI rebalancing, negative news flow on cement sector and strong rumours of a delay in launching of stock market support fund. The pressures of futures rollover week played its part in subdued market.
Investors also thought it prudent to reduce positions ahead of the long Eid holidays, followed by expected harsh budget. Reports of resignation by PSX CEO Richard Morin were received with mixed feeling. Profit-taking dragged the index down to intraday low by 797 points.
According to figures released by the National Clearing Company of Pakistan, foreign investors sold shares worth $1.12 million; mutual funds offloaded equity valued at $1.58m and individuals disposed of shares worth $2.04m. These were absorbed by banks and companies, which collectively mopped up shares amounting to $5.64m.
Selling was observed across the board in the lead of exploration and production, fertiliser and banks which cumulatively contributed 492 points to the downside. Cement shares also fell 59 points after reports of disagreements over pricing issue with DG Khan, Kohinoor, Cherat, Pioneer and Maple Leaf all closed at their lower circuits. In banking, Habib Bank declined 3pc, Bank Al Habib 1.8pc and Bank Alfalah 1.5pc closed in red while National Bank finished at its lower circuit.
The volume increased 22pc over the previous day to 152.3m shares while traded value also went up 46pc to reach $49m. Stocks that contributed significantly included Fauji Cement, Bank of Punjab, Unity Foods, Engro Polymer and Chemicals and Maple Leaf Cement cumulatively formed 28pc of total turnover.
Published in Dawn, May 29th, 2019