Stocks tumble 289 points in overbought market

Updated December 10, 2019

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The dip in the KSE-100 index was on the back of investors’ scare of an overbought market and projections of bruised corporate quarterly results in most sectors. — FIle
The dip in the KSE-100 index was on the back of investors’ scare of an overbought market and projections of bruised corporate quarterly results in most sectors. — FIle

KARACHI: The stock market turned red on first trading day of the week with the KSE-100 index falling 289.44 points (0.71 per cent) on Monday and closing at 40,442.81.

The dip in the index was on the back of investors’ scare of an overbought market and projections of bruised corporate quarterly results in most sectors. Lack of positive triggers and an increase in electricity tariff from Dec 1 put downward pressure on key sectors. But many traders kept up their faith, calling the correction as an opportunity to accumulate value stocks.

The market opened on a positive note, but investor exuberance over the contraction in current account deficit seemed to be tapering off as other important indicators such as lower projected GDP growth did not support the feeling that the economy was out of the woods.

The index touched intraday high by 184 points before succumbing to selling pressure that dragged it down to intraday low by 417 points. Individuals, who have been the leaders of the rally that started on Aug 19, were net buyers of equity worth $1.26 million.

Foreigners also continued to accumulate stocks, albeit at slower pace. The volume declined by 23pc to 321m shares, from 417.1m while traded value dipped by 25pc to $73.5m as against $97.9m. Stocks that contributed significantly included Unity Foods, Maple Leaf Cement, Lotte Chemical, Pak Elektron and Hascol Petr­oleum, which formed 27pc of total turnover.

Sector-wise, banking, oil marketing companies, steel, autos and cement saw sell off. Among scrips, major drag came from United Bank, down 3.21pc, Habib Bank 1.46pc, MCB 1.06pc, Aallied Bank 2.11pc, Lucky Cement 2.80pc, DG Khan Cement 2.9pc, Fauji Cement 2.51pc, International Steels 4.14pc, Hub Power 1.45pc, Sui Northern Gas Pipelines 4.32pc and K-Electric 2.77pc. In addition, Pakistan State Oil, lower by 3.55pc, Pak Suzuki 5pc and Honda Atlas Cars 5pc also weighed down on the market performance.

Published in Dawn, December 10th, 2019