KARACHI: The stock market extended its decline for the second day as the KSE-100 index tumbled 293.28 points (0.75 per cent) and closed below the 39,000 level at 38,906.40.

Investor participation remained thin as most of the positivity was factored in the massive rally on first trading day of the week. The possibility of relaxation of the International Monetary Fund fiscal targets; trade deficit which amounted to $15.8bn for 8MFY20, down 27pc and the great expectations of ease in monetary policy due later this month, following the lower than expected inflation numbers for February together with cut in yield on government papers were all positives ignored by the market.

The Federal Reserve cut its benchmark interest rate by half a percentage point in response to the growing threat to the global economy from coronavirus, marking the first such cut since December 2008. On the other side, local investors were worried over the persistent foreign portfolio outflow.

While cement sector recorded sales growth of 34pc, those of pretroleum fell to 1.11m tonnes during February, marking the lowest monthly level in nearly a decade.

The index slid to touch intraday low by 437 points which sparked interest of value hunters. Analysts at brokerage AHL said: “Investors preferred cyclical stocks over heavyweights like Habib Bank, United Bank, Engro Corporation, Hub Power, Fauji Fertiliser, Oil and Gas Development Company (OGDC) and Pakistan Petroleum.”

After making to the intraday high by 63 points, profit-taking took hold once again dragging the index in the red.

Cement scrips continued to be major movers as price flare up was seen in Kohat, higher by 6.8pc, Pioneer 5.3pc, Cherat 2.9pc, Fauji 2.4pc, Maple Leaf 0.8pc and DG Khan 0.9pc.

Selling pressure was witnessed in Pakistan Petro­leum, down 1.9pc, Pakistan Oilfields 1.8pc, OGDC 2.4pc, Engro Corporation 2.05pc, Dawood Hercules 1.82pc, Engro Fertilisers 1.74pc, Meezan Bank 2.92pc, Bank Al Habib 0.89pc and Bank Alfala 1.20pc.

Published in Dawn, March 5th, 2020