KARACHI: The stock market saw massive selling on Monday that dragged the KSE-100 index down by 588.61 points (1.44 per cent) which closed at 40,209.82.

It wiped out much of the gains of 727 points (1.8pc) that the index had accumulated the whole of the previous week. Trading took off on a positive note and the benchmark managed to hit intraday high by 249 points.

Later in the day, the market succumbed to selling pressure as investors started to interpret the report of Asia Pacific Group’s (APG) decision to maintain Pakistan’s position on enhanced follow-up list, which was primarily an evaluation based on performance as of February. The situation will be clarified after the plenary session scheduled to be held during October 21-23.

Although the market concerns were mainly for a fall in the black list and that appeared to have been averted, investors who are at the edge of their nerves on the uncertainty over political situation, took the APG’s observations as a clear negative and sent in flurry of sell orders. Intraday, the index touched low of 649 points.

The increase in new Covid-19 cases further dented participants’ confidence who feared a second wave leading to more lockdowns with a dreary impact on the already doddering economy. Retail investors considered it best to book profit and close positions which saw the second-tier stocks dive deep in the red. The biggest sell-off came from the broker proprietary trading in the sum of $2.85m while foreigners sold shares worth $0.50m.

Exploration and production led the laggards, giving up 98 points from the index as all three major scrips –– Pakistan Petroleum, Oil and Gas Development Company and Pakistan Oilfields –– closed in the red on the decline in international oil prices. Including the losses in Hub Power, Habib Bank and TRG, the index lost 189 points.

In cement sector, Lucky and Maple Leaf together with other less prominent scrips, closed in the red.

Published in Dawn, October 13th, 2020