Stocks lose another 203 points on political noise

Updated 14 Oct 2020

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In this file photo, Pakistani stockbrokers watch the latest shear prices on a digital board during a trading session at the Karachi Stock Exchange (KSE). — AFP/File
In this file photo, Pakistani stockbrokers watch the latest shear prices on a digital board during a trading session at the Karachi Stock Exchange (KSE). — AFP/File

KARACHI: Stocks stood battered for the second successive day as the KSE-100 index fell 203.14 points, or 0.51 per cent, to close at 40,006.68 on Tuesday.

The uncertainty over the political scene kept investors away from the market. “As they say on Wall Street, uncertainty is worse than bad news for the market,” said a participant.

Investors are happy to keep cash deep inside the pocket than take fresh positions where the external events override the equity fundamentals. Other sentiment dampeners were the higher than expected inflation numbers for September and the lingering fear over the second wave of Covid-19 that could throw the economy again into turmoil with lockdowns and curtailment of labour activity. Some major investors were also blaming the worries over the outcome of the FATF meeting decision to be unveiled on Oct 21-23.

But other said that Pakistan had already averted a fall into the black list and no one was expecting a promotion to white list, therefore retention in the grey list was really a non-event.

The market started off in the green leading the index to intra-day high by 91 points, but the benchmark soon lost the foothold. Analysts at AHL Securities stated that selling was observed across the board with the exception of PSO, HBL, Unity and KE.

Buying activity in Lucky Cement towards the close of the session also contributed to the late market recovery.

The traded volume declined 23pc over the earlier day to 290.1m shares as investors preferred to stay on the sidelines. The value also declined 24pc to $59.9m.

Foreign investors did some cherry-picking of shares worth $0.12m as they often do when there is blood on the street. Among local participants, individuals, mutual funds and companies were major sellers while banks and insurance companies did some value investing on dips.

Hubco fell by 1.9pc; MCB 1.4pc; PPL 2pc; OGDC 1.6pc; Engro 1pc; Fauji fertiliser 0.6pc and UBL 0.2pc.

Published in Dawn, October 14th, 2020