KARACHI: Stocks tumbled on Wednesday after the latest figures of the death toll of surging fourth wave of pandemic frightened investors who dumped the stocks mainly in the second half. The KSE-100 index sank 369 points, or 0.77 per cent, to close at 47,318.
Market capitalisation saw erosion of Rs56 billion in a day.
Stocks started off on a positive note as traders were encouraged by the SBP decision to leave the policy rate unchanged at 7pc to support economic growth. The IMF also revised GDP growth projection for Pakistan upwards to 3.9pc for FY21. The index thus climbed to intraday high by 188 points, before fear gripped investors who started to liquidate positions in the rollover week.
The investor sentiments shifted as realisation dawned over the positivity rate of Covid-19, in the business and industrial hub Karachi, which has run up to all-time high while the number of active cases in the country swelled to 59,899 on July 27.
Investors wondered if the government would be able to ride the wave or give in to extensive lockdowns with adverse consequences on economy, growth, exports, business and industrial activity, leading inevitably to job losses.
Chatter over a two-week lockdown in Sindh spooked investors. Sentiments further dampened over urban flooding in Islamabad after cloudburst that caused heavy rainfall. A major brokerage house noted that the market troubles were exacerbated after “probe by the regulator on account of unusual price movement in certain stocks”. The index tanked to intraday low by 445 points.
Day traders were the first to flee which saw individuals as the major sellers of stocks worth $5.89m. Mutual funds and foreign investors took the opportunity to buy. Among scrips the leading laggards were the technology stock TRG that erased 73 points from the index, followed by Unity Foods wiping away 25 points, National Refinery; Hub Power Co and Lucky Cement scrapping 16 points each.
Published in Dawn, July 29th , 2021