Stocks shed 214 points on mutual fund sell-off

Updated January 16, 2020

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The indecisive mood of the investors witnessed in the last two sessions extended to early trade on Wednesday. The KSE-100 index opened slightly positive and crawled up to intraday high by 32 points but soon succumbed to selling pressure. — AFP/File
The indecisive mood of the investors witnessed in the last two sessions extended to early trade on Wednesday. The KSE-100 index opened slightly positive and crawled up to intraday high by 32 points but soon succumbed to selling pressure. — AFP/File

KARACHI: The indecisive mood of the investors witnessed in the last two sessions extended to early trade on Wednesday. The KSE-100 index opened slightly positive and crawled up to intraday high by 32 points but soon succumbed to selling pressure.

During trading, the index sank to intraday low by 329 points but managed to recover some of the ground and close with a loss of 214.02 points (0.50 per cent) below the 43,000-level at 42,993.02.

Domestic politics was the major stumbling block as allies of the ruling PTI were one after the other voicing their disapproval of the policies of the centre and threatening to break ties. It gave rise to uncertainty and although no one expected an imminent fall of the government, investors thought it prudent to book profit and stand on the sidelines until the dust had settled.

The upcoming results season and the monetary policy decision expected to be announced on Friday also kept the market under suspense. One soothing factor was the continuous buying by foreigners who picked up blue chips worth $2.21 million while mutual funds were the major sellers of shares valued at $3.17m, which a manager mused could represent some key redemptions.

The volume declined 32pc to 171.3m shares, from 249.7m with cement sector leading the charts at 34m shares. Traded value also dipped by 22pc to $39.6m.

Sector-wise, the oil and gas chain (ie marketing companies, exploration and production and refineries) were battered. Banking could not attract buyers but cement caught investors’ fancy.

Among scrips, the negative contributors to the index were Hub Power, down 1.6pc, Pakistan Petroleum 1.2pc, Pakistan Oilfields 0.9pc, Nishat Mills 2.95pc, K-Electricity 1.33pc and Dawood Hercules 1.18pc. On the flip side, some gainers were MCB, higher by 0.87pc, Pakistan Tobacco 1.13pc and DG Khan Cement 1.87pc.

Published in Dawn, January 16th, 2020