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KARACHI: The stocks fell for the second day as investors booked profit ahead of the MSCI decision on reclassification of Pakistan. The KSE-100 index dropped 189 points, or 0.40 per cent, and closed at 46,730.
The trading started on a negative note where the stocks continued to sink with the index reaching intraday low of 301 points. Buying at dips by local corporates, insurance companies and high net-worth individuals enabled the index to bounce back into the green to an intraday high by 76 points. But the optimism did not last long as most investors thought it wiser to book profit and wait for the MSCI decision.
Although due on Tuesday, the MSCI public statement did not arrive during the trading time and was thought to be announced late night. However, market was prepared for the worst. Heavy sell-off by foreign investors of stocks worth $5.31m in first two days of the week signified that foreign fund managers were sure of a negative outcome.
Foreigners were also ditching banking and cement stocks on the massive depreciation of the rupee against the dollar that already ate up much of the value of their portfolio. Mutual funds and insurance companies mopped up the liquidity for the second day, putting a floor on the index fall. The gruelling pressure on the rupee mainly on account of rising trade gap, also dented investor sentiments.
Sector-wise, cement and steel—the two promising sectors—continued to be plummeted. Among the former, Cherat, Maple Leaf, D.G. Khan and Lucky dipped in the red. Steel stocks also ended with losses all around. Cement sector took away 75 points from the index, followed by E&Ps (39 points), automobile (29 points), O&GMCs (23 points) and chemicals (21 points).
Stocks that were major laggards included Lucky Cement (39 pointts), TRG (19 points), HBL (15 points), OGDC (14 points) and PSO (13 points). The trading volume up by 1pc over the previous day to 434m shares and the value also declined 6pc to $67.3m.
Published in Dawn, September 8th, 2021
