KARACHI: Stocks came in for heavy battering on Thursday as the KSE-100 index plunged by 625.40 points, or 1.34 per cent, to close at 46,142.74.

The market opened slightly in the positive by 49 points, but the index soon succumbed to selling pressure. Throughout the day, profit-booking continued which pulled the index to intraday low by 648 points. The National Clearing Com­pany of Pakistan numbers showing activity by various participants revealed that mutual funds were the major spoilers of the market as they liquidated positions in the huge sum of $5.03m.

An asset manager of one of the top mutual funds confided that a couple of big funds may have decided to book profit at the current high levels and re-enter at around 45,000. “There have been no major redemptions today, to my knowledge,” he affirmed.

Investors were concerned over the IMF demand to abolish Rs200bn corporate income tax (CIT) exemptions and draw up a new circular debt plan. Similarly, Pakistan’s import bill and domestic debt seemed to fatten.

The upcoming rollover week also pushed leveraged players to square positions while the prudent remained cautious ahead of the FATF review just around the corner. But the hardest blow to investor confidence came from lower-than-expected dividends from major blue chips PSO, ENGRO, MEBL that disclosed the results on Thursday failed to excite investors.

Profit-booking was observed in banks which wiped off 247 points from the index, followed by cement sector down 83 points fertilisers 74 points, E&P 68 points and O&GMCs 55 points.

The scrips that were the biggest drag on the index included HBL (91 points), Engro (58 points), PSO (52 points), Lucky Cement (43 points) and MCB Bank (41 points).

The traded volume decreased 18pc over the previous day to 578m shares and the value also declined 19pc to Rs23.2bn. Stocks that accounted for about 30pc of the turnover included DSL, TELE, KEL, WTL and ANI.

Published in Dawn, February 19th, 2021