KARACHI: As panic-prone investors rushed to jettison shares right after opening on Monday, the stock market witnessed a bloodbath which went on throughout the day.

The KSE-100 index settled at 39,072.47 after it went into a free fall to hit the intraday low by 1,206 points, but bounced back a little to show loss of 998.36 points (2.49 per cent) for the day.

Rs206 billion was wiped off the capitalisation in a single day as all of the market turned red with 372 stocks among 417 actives closing in the red. The 31 scrips that gained were generally considered trash stocks.

Although there were a host of factors that spoilt the mood, individuals were the major sellers of shares worth $5.59 million who offloaded to meet margin calls on their leveraged positions. Foreign selling also intensified with an outflow of $3.29m. Banks accumulated cheaply available blue chips with buying of $3.92m which provided some support to the index.

Investors’ sentiments dampened on release of the CPI data over the weekend that revealed 9pc year-on-year spike, prompting the State Bank of Pakistan to hint at an uptick in policy rates.

The deepening political uncertainty also was at the heart of investors’ nervousness which was exacerbated by talks of a second wave of pandemic in winter which could trigger another major lockdown of economic activities. The slump in international oil prices also saw heavy battering in the exploration and production sector.

The volume increased 18pc to 409.9m shares while the traded value declined 1pc to reach $76.5m. Selling activity was observed almost across the board, with major downside seen in E&P, banks, fertilisers, and oil and gas marketing companies.

Major scrips Hub Power, lower by 4.3pc, Engro Corp 2.6pc, Pakistan Petroleum 3.7pc, Pakistan Oilfields 2.6pc, MCB 1.8pc, Lucky Cement 1.5pc, Habib Bank 1.1pc and Fauji Fertiliser 1.4pc cumulatively dragged down the index by 317 points.

Published in Dawn, October 6th, 2020

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