KARACHI: The stock market extended its losing streak with the KSE-100 index down another 175 points, or 0.4 per cent, to settle at 46,717 on Wednesday.

The index managed to bounce back a bit from its intraday drop of 386 points. The main spoiler of the market was again the eroding value of the rupee against the dollar, which during the trading caused a bit of a stir as it hit the all-time low of Rs170 in the open market. Investors worried over the cost of production and the corporates’ ability to absorb or recover them in selling prices.

Many knowledgeable participants, however, were loath to blame just the flight of the dollar for the market woes.

Yawar-uz-Zaman, head of research at Pearl Securities, said that the investors were spooked by deterioration in economic numbers. The widening trade gap over the last three months; global commodity markets and the latest grim news of Ogra’s recommendations of massive increase in POL product prices by Rs10 per litre were causing jitters.

Investors were also concerned over the Monetary Policy to be unveiled by the SBP on Monday which could signal monetary tightening going forward. Dealers said that the impact of geo-political situation was already factored in stock prices.

Foreign investors continued to ditch stocks, offloading those worth $2.35m, taking the five-day sell-off to a staggering $16.69m. Mutual funds which also were the major sellers a day ago reduced portfolio by $1.03m. A major participant argued that there were no big redemptions; the funds were shuffling assets to money market.

Cement continued to be battered contributing the highest 83 points in the index loss. E&P, O&GMCs, pharmaceutical, refinery and textile sectors saw selling at available prices. Banks made some gains and technology stocks also were able to hold on as some popular stocks ended in green.

Stocks that pulled down the index included MLCF (21 points), HMB (18 points), System Ltd (17 points), AGP (17 points) and MEBL (16 points). The trading volume declined 31pc over the previous day to 333m shares.

Published in Dawn, September 16th, 2021

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