Stocks dip 203 points rate hike concerns
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KARACHI: Stocks tumbled on Friday with the KSE-100 index taking a dip of 202.91 points (0.60 per cent) and settle at 33,672.49.
The market was rattled by higher interest rates likely to be announced in the State Bank monetary policy which would be announced sooner than expected on July 16 instead of the month end.
Investors were also spooked by the fragile economy and the gathering clouds on political front. The market took the finance minister’s assertion of market support fund activation in 4-5 days with a pinch of salt.
SBP reserves fell by 2.6pc over the previous week to $7.1bn dollars, evidencing import cover of 1.4 months. Analysts said that drop in auto sales indicated signs of economic slowdown.
“Surge in local fertiliser prices and renewed hopes over positive outcome of prime minister’s visit to the US invited mid-session support,” said analyst Ahsan Mehanti. But selling intensified in the final hour before close of the market as investors were loath to hold positions ahead of the weekend.
Foreign investors continued to cherry-pick stocks worth $0.67 million, although they remained concerned over further devaluation of the rupee. Foreign inflows in the equity market during 2019 to-date stand at $59.6m.
The volume increased by 40pc to 55.3m shares as against 39.5m while traded value also surged by 58pc to $14.3m, from $9.1m. Stocks that contributed significantly included K-Electric, Maple Leaf Cement, Bank of Punjab, Escorts Investment Bank and TRG Pakistan, which formed 35pc of total turnover.
Sectors contributing to the dismal performance included cement, down 40 points, power 28 points, oil and gas marketing companies 27 points, exploration and production 18 points and autos 18 points.
Stocks that took the brunt of the fall included Pakistan State Oil, lower by 21 points, Engro Corporation 15 points, Hub Power 15 points, Pakistan Oilfields 12 points and DG Khan Cement 11 points. Shares which showed increase in prices included Fauji Feriliser, higher by 30 points, Engro Fertiliser 13 points, United Bank 10 points, Habib Bank 9 points and Meezan Bank 3 points.
Published in Dawn, July 13th, 2019
