KARACHI: Stocks went into free fall on Thursday as investors were spooked by the massive rise in Corona cases globally and the fear over the rapidly rising number of new infections in the country. The problems were exacerbated by the heated political atmosphere and the massive rallies leading to the Gilgit-Baltistan elections on the Nov 15.
“Huge crowds provide a perfect ground for the virus to spread”, said a market strategist. The KSE-100 index sank 632.76 points (11.54 per cent) and settled at 40,564.56 after breaking the 41,000 barrier.
The market experienced an agonising slow fall to intra-day low by 704 points during the day before making slight recovery towards the end. The paper value of corporate Pakistan stood down by Rs 110 billion on Thursday.
Foreign investors dumped stocks worth $0.62 million as they have lost the appetite for Pakistan stocks after substantial appreciation of the rupee. However, figures released by the National Clearing Company of Pakistan provided some relief as almost all the local individual and institutional participants were net buyers save for the mutual funds.
The massive sell-off by mutual funds of equity worth $5.56m spoiled the market mood. Market strategists said that some among the 18 asset management companies may have decided to jettison shares and move funds to money market. There may have also been run on redemptions by the nervous certificate holders.
The brunt of the blow was taken by the banking sector, followed by the exploration & production and cement. The increase in international coal prices together with lower despatches in first week of November over the earlier month, put pressure on the cement sector where Maple Leaf, Pioneer, Lucky, Cherat, D.G. Khan and Fauji Cement lost values.
The E&Ps could not hold on to their old levels despite increase in global oil price so that Pakistan Petroleum Ltd, Oil and Gas Development Company (OGDC) and Pakistan Oilfields Ltd shed values.
Major scrips that dragged the index down included OGDC, losing 43 points, Habib Bank Ltd 43 points, Pakistan Petroleum Ltd 41 points, Hub Power Company 38 points and United Bank Ltd 35 points.
Published in Dawn, November 13th, 2020