Stocks bleed 785 points as political noise amplifies

Updated October 22, 2019

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Stock prices collapsed on Monday under the pile of unsavoury news that sent investors fleeing for the exit door. — AFP/File
Stock prices collapsed on Monday under the pile of unsavoury news that sent investors fleeing for the exit door. — AFP/File

KARACHI: Stock prices collapsed on Monday under the pile of unsavoury news that sent investors fleeing for the exit door. The KSE-100 index tumbled 785.42 points (2.32 per cent) to close at 33,084.73. A sum of Rs127 billion was wiped away from market capitalisation.

The mounting tensions on the border with India and the deepening political uncertainty due to the intended march to Islamabad by several political parties darkened the mood of investors.

As the government’s plans to deal with protesters remained generally unknown, investors thought it prudent to take profit and stand clear. Many analysts attributed the fright and flight to the Financial Action Task Force’s decision that came with warnings and caution that the country had four months until February 2020 to comply fully with its action plan on anti-money laundering and terror financing or be prepared to be dumped in the black list.

Since the official statement of FATF was released after the close of session last week, the full impact of negative connotations was reflected in trading on Monday.

Traders said that start of the rollover week also added to spoil the mood, while investors also braced for the upcoming financial results, most expecting dreadful performance of cyclical steel and cement.

Foreigners bought stocks worth $1.06 million while local companies, individuals and brokers dumped shares. The volume increased 13pc to 130.1m shares, from 115.2m whereas traded value was up 1pc to $31.7m.

Banking was the chief laggard, losing 227 points with most banks seeing their stock prices plunge. Exploration and production came under pressure where Oil and Gas Development Company, Pakistan Petroleum and Pakistan Oilfields closed in the negative following a fall in international oil prices.

Scrips that contributed the major losses to the index included: Habib Bank, down 2.39pc, MCB 3.15pc, Bank Al Habib 2.83pc, United Bank 1.84pc, National Bank 4.56pc, Bank of Punjab 6.84pc, Meezan Bank 2.36pc, Pakistan Petroleum 2.56pc, Oil and Gas Development Company 2.31pc, Pakistan State Oil 4.88pc, Pakistan Oilfields 1.57pc, Lucky Cement 4.54pc, Hub Power 2.92pc and Sui Northern Gas Pipelines 4.90pc.

Published in Dawn, October 22nd, 2019