Index sheds 581 points on economic uncertainty

Updated February 08, 2020

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Investors were concerned about the bond yields that were trading at higher rates in the secondary market. — AFP/File
Investors were concerned about the bond yields that were trading at higher rates in the secondary market. — AFP/File

KARACHI: Stocks tumbled for the second day on Friday as the KSE-100 index fell 580.77 points (1.43 per cent) and settled for the weekend at 40,143.63. Market appears to have resigned to sell-off after the earlier resounding gains since August last year.

A host of issues caused concern amongst investors which included the bond yields that were trading at higher rates in the secondary market. Together with the record high inflation in January, participants’ optimism over early cut in policy rate fizzled out.

Besides the uncertainty on the political front, the Financial Action Task Force’s decision over the Pakistan status to be announced later this month, the ongoing International Monetary Fund’s second review amid revenue collection falling short of the target, leading investors to fret over an upcoming mini-budget, made a strong case for participants to take profit and move to the sidelines.

The market opened positive and reached intraday high by 145 points. Selling was triggered in the second half which saw the index sink to intraday low by 678 points. Foreign outflow slowed down to $1.2 million.

The volume increased 51pc to 193.5m shares from 127.9m with cement leading the table with 43.3m shares. Traded value also rose by 16pc to reach $44m as against $38m the previous day. Stocks that contributed significantly included Maple Leaf Cement, Lotte Chemical, Unity Foods, Hascol Petroleum and Bank of Punjab, which formed 38pc of total turnover.

Sectors contributing to the dismal performance included banks, declining by 132 points, oil and gas marketing companies 71 points, exploration and production 65 points, cement 65 points and power 42 points. Cement came under selling pressure where Lucky, lower by 0.6pc, DG Khan 5.8pc, Maple Leaf 5.3pc, Pioneer 2.2pc, Fauji 5.8pc and Cherat 3.7pc were the leading laggards.

Major scrips that proved to be the drag were Habib Bank, down 1.7pc, Pakistan State Oil 4.5pc, Dawood Hercules 2.5pc, Bank Alfalah 3.1pc and Mari Petroleum 2.6pc.

Published in Dawn, February 8th, 2020