KSE-100 tumbles 872 points as lockdown fears dampen sentiment

Published November 23, 2020
Commercial banks, cement and oil and gas marketing companies were the top losers during intra day trade. — AFP/File
Commercial banks, cement and oil and gas marketing companies were the top losers during intra day trade. — AFP/File

The benchmark KSE-100 index tumbled as much as 872.15 points or 2.17 per cent on Monday as fears of a complete lockdown, spurred by a sharp spike in Covid-19 positivity rate, dampened overall market sentiment.

However, in the later half of the session, shares reversed some of their losses after the central bank announced its new monetary policy, keeping interest rate unchanged at 7pc. The market closed 554 points – or 1.38pc – down.

Commercial banks, cement and oil & gas marketing companies were the top losers during intra-day trade whereas Hascol, Unity Foods and TRG Pakistan led the volume charts.

“Fears of a complete lockdown [are] affecting market sentiments," said Mohammad Sohail of Topline Securities. He said a total lockdown would affect the economy and corporate profits.

"The market remained in a grip of selling pressure today as growing coronavirus cases, rising deaths and the government hinting at a complete lockdown weighed down market sentiments," said Umer Pervez, the director business development at AKD Securities.

"While Pakistan has received debt relief of $800 from G20 countries, media reports highlighting successful government-IMF talks hinged on Pakistan taking unpopular measures — such as raising electricity tariffs, higher tax collection targets and increasing the repo rate — was a further drag on sentiments," he said.

But, Pervez added, that the market found support at lower levels as investors were lured back in by attractive valuations, particularly after the SBP maintained the policy rate at seven per cent.

Read: SBP keeps policy rate unchanged at 7pc for a second time

Economic activity in Pakistan regained momentum during the last quarter after the government lifted lockdowns following the country's relative success in containing the pandemic.

Exports have rebounded to their pre-Covid levels, cement off take rose to a record high, oil sales inched up, and auto sales have also posted massive increases since hitting rock bottom in April.

However, the National Command and Operation Centre (NCOC) was informed on Monday that hospitalisations due to Covid-19 in Pakistan have doubled in the last two weeks as the number of cases continue to rise during the second wave of the pandemic.

In light of this, the government has also announced that all educational institutions will close down from November 26 (Thursday).

Over the weekend, Prime Minister Imran Khan had warned that the government would have no choice but to enforce a complete lockdown if the opposition did not desist from holding public gatherings.

“I do not want to take measures that will start hurting our economy which at the moment is showing signs of a robust recovery,” the premier had said.

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