KARACHI: The KSE-100 index plunged by 264.03 points (0.83 per cent) on Wednesday to settle at 31,565.21 points. The market saw second day of heavy foreign selling of shares worth 2.60 million, which together with the companies deciding to offload stocks of 1.25m cast a blow on the benchmark index.
Support came from individuals who put $2.02m in fresh buying, while other institutional investors remained mainly on the sidelines. Index showed volatility throughout the session and moved between the intra-day high and low by 39 and 357 points respectively.
Market watchers attributed the stock meltdown to investors’ concerns over the ongoing futures’ rollover week. The market volatility was also because of continuous rise in bond yields in secondary market: 10-year yields at 12.15pc from 11.98pc on Sept 19 ahead of the Treasury-bill auction scheduled later in the evening. Despite government’s claim and IMF’s endorsement on the improvement in current account deficit and increase in foreign exchange reserves, the incessant selling by foreigners was a cause for concern.
Volumes increased from 88.8m shares a day ago to 95.2m shares on Wednesday representing increase of 7pc. Traded value also improved by 6pc to reach $26.3m as against $24.9m the previous day. Stocks that contributed significantly to the volumes included WorldCall Telecom Ltd, Pakistan State Oil, Maple Leaf Cement Factory, K-Electric and Hascol, which formed 39pc of the aggregate turnover.
The international crude prices also moved lower which led to negative impact on local oil and gas listed chains from exploration and production to oil marketing companies. Power sector led the volumes table with 16.9m shares and contributed 48 points to the index downside.
However, the sell-off was led by banking sector, which caused the biggest loss of 108 points. Habib Bank Ltd, down 1.8pc, United Bank Ltd 2.5pc, National Bank Pakistan 3.8pc and MCB Bank Ltd 0.7pc all closed in the red. Other major drags to the index were Hub Power Company, down 2.94pc, Oil and Gas Development Company 1.58pc, Pakistan Petroleum Ltd 0.45pc, Engro Corporation 0.76pc and Engro Fertiliser 0.91pc.
Published in Dawn, September 26th, 2019