KARACHI: The stock market opened positive on bullish momentum of the outgoing week, which received further support from the interest rate cut by 100 basis points to eight per cent that was announced by the Monetary policy committee of the State Bank of Pakistan after trading hours on Friday.
The KSE-100 index started up by 250 points and raced to intraday high by 385 points. But the investor enthusiasm was soon quashed as profit-taking took hold of the market, sending it spiralling down by intraday low of 238 points. The benchmark finally closed down by 203 points (0.6pc) at 33,805.
Traders said the overpowering concern of the breakout of coronavirus sapped investors’ confidence to take fresh positions and eclipsed the interest rate cut, the fourth since COVID-19 struck the planet. Moreover, profit-taking at the 34,000-level was thought to be prudent.
Banking led the losers as they feared a hit on their income due to cut in interest rates but the cement sector also faced selling pressure regardless of the benefit of lower interest that would accrue to the leveraged cement companies.
Foreigners sold shares worth $3.85 million while banks offloaded shares of $5.04m. Those were picked up by individuals, brokers and insurance companies. The volume increased 23pc to 262m shares from 213.3m while traded value also jumped by 17pc to reach $45.4m. Stocks that contributed significantly included TRG Pakistan, K-Electric, Worldcall Telecom, Maple Leaf and First Capital.
Sectors contributing positive points to the index included exploration and production, higher by 54 points, and food 19 points. On the other hand, negative performance came from banks, down 117 points, cement 58 points, fertiliser 39 points and oil and gas marketing companies 14 points.
Gaining scrips that prevented the index from sinking lower included Oil and Gas Development Company, up 1.8pc, Pakistan Petroleum 1.3pc and ICI 7.4pc. On the flip side, shares that dragged down the index were Lucky Cement, declining by 1.7pc, MCB 2.3pc, United Bank 2pc and Bank Al Habib 3pc.
Published in Dawn, May 19th, 2020