KARACHI: The stock market went into turmoil on Monday on the sudden flare up in political temperature with the arrest of the leader of Opposition after his bail was rejected in the money laundering case. The KSE-100 index plummeted 960 points (2.30 per cent) and closed below the 41,000 level at 40,741.
Market opened slightly in the negative and oscillated between the red and green until after midday when all hell broke loose with the index going into a free fall. Small Investors who were still unaware of the developments thought it wise to jump out of stocks first and ask questions later. By the end of the day, as much as Rs164 billion was hacked off the aggregate value with 351 stocks settling in the negative against only 57 in the positive.
Major participants tried to calm the market which saw the index bounce back a little from the intraday low of 1,056 points. Data released by the National Clearing Company of Pakistan Ltd in the evening did now show heavy exodus of foreign portfolio investment as the foreign sell-off remained at the daily average of $1.26 million.
Insurance, banks and other organisations with surplus cash thought it just the right time to buy when the blood was on street. Mutual funds were the major sellers of equity worth $5.35m. Analysts at Arif Habib Ltd considered another reason for the stock decline to the previous week’s rollover session’s trickle down impact on the first trading session, primarily due to low settlement ratios.
The volume decreased 6pc to 407.2m shares, from 435m. Traded value also declined by 7pc to reach $86.1m. Oil and gas marketing companies, refinery, banks and cement sector saw heavy selling pressure.
Habib, down 3.6pc, United 2.5pc, Al Habib 4.1pc, Meezan 1.8pc, MCB 1.4pc among banks and Kohat 7.5pc, Maple Leaf 6.7pc, Pioneer 6.1pc, DG Khan 4.9pc and Cherat 4pc in cement dented the index.
Published in Dawn, September 29th, 2020
