KARACHI: As it dawned upon investors that resurgence of the second wave of Corona-19 was for real, they lost appetite for shares and ran to take cover of other safer investment assets.

The KSE-100 index started to sink with the opening bell, spooked by the threat of widespread lockdowns leading to industrial closures; reduced capacity utilisation with their adverse impact on the corporate bottom lines.

The KSE-100 index declined by 554.66 points (1.38 per cent) and closed at 39,632.52.

The Prime Minister’s caution that a continued rise in infections at the current rate could compel a complete lockdown, followed by the Education Minister Shafqat Mahmood’s announcement of closure of educational institutions from Nov 26 to Jan 10, 2021 added to investors’ concerns.

“Investors recalled the terrifying decline in the index to 27,047 points on March 26, from 43,468 on Jan 14, after the country went under lockdowns to arrest the spread of the pandemic”, said a market watcher.

Short-term investors and mutual funds could not afford another blow and were the major sellers of equities on Monday. Individuals dumped shares worth $3.37 million as the rollover week aggravated their fears.

Mutual funds also realised cash for redemptions as well as switched over to money market funds. Companies and banks took advantage of massive bleeding with each picking up shares worth around $4m. Foreigners watched from the side-lines.

Other disconcerting issues of political and economic uncertainties were also at the back of investors’ mind. The SBP announced monetary policy, keeping the policy rate unchanged at 7pc which was in line with market expectations. It helped calm the market which recovered a little from the intra-day low of 873 points.

Red was splashed all over the board with banks, cement, oil & gas marketing companies and technology sectors being major losers. Among scrips, Habib Bank Ltd, TRG Pakistan, Pakistan State Oil, Meezan Bank Ltd, Sui Northern Gas Pipelines Ltd, MCB Bank Ltd and Maple Leaf Cement Factory were the principal drag on the index.

Published in Dawn, November 24th, 2020