KARACHI: Broad-based sell-off akin to a bloodbath was witnessed at the stock market on Wednesday where the KSE-100 index went into a free-fall dipping intraday by as many as 1,221 points.

Investors were rattled as the index continued to dip deeper in the red, prompting them to be the first to dump equities and seek the shelter of capital protected investment avenues. Finally, as panic subsided and the market started to calm down before the end of trading hours, the index recovered some of the lost ground on value buying and closed with a loss of 412 points, or 0.89pc, at 45,597, yet knocking of another support level of 46,000.

Marketmen tried to figure out the reasons for extreme volatility, which is convincing only in varying degrees. One said that the selling pressure had built up due to geopolitical tension and uncertainty on macro level. Others linked it to the roll-over week and uncertainty over the IMF meeting to be held in first week of October. Brokerage AHL Ltd stated: “Leveraged positions of retail investors played havoc on market today, which received margin calls after continuous declines witnessed in the index for the past couple of sessions’.

Raza Jafri, Head of Equities at Intermarket Securities, thought there was method in madness. He observed that the index had lost nearly 600 points towards the end on Tuesday session and the pressure on Wednesday was an extension by investors who were desperate to seek exit in early trade.

He thought that the selling may have been exacerbated by redemptions at mutual funds. “However, value buying came in at dips and encouragingly enabled the index to recover about two-thirds of its intraday losses towards the end of trading session”.

Sector-wise, major falls were recorded the heavy-weight technology and E&P sectors. Shares on the fertiliser, refinery, cement, steel and banks also came under pressure. Stocks that were major laggards included TRG (38 points), System (38 points), HBL (25 points), UBL (20 points) and CHCC (16 points).

Published in Dawn, September 23rd, 2021

Opinion

Editorial

Judiciary’s SOS
Updated 28 Mar, 2024

Judiciary’s SOS

The ball is now in CJP Isa’s court, and he will feel pressure to take action.
Data protection
28 Mar, 2024

Data protection

WHAT do we want? Data protection laws. When do we want them? Immediately. Without delay, if we are to prevent ...
Selling humans
28 Mar, 2024

Selling humans

HUMAN traders feed off economic distress; they peddle promises of a better life to the impoverished who, mired in...
New terror wave
Updated 27 Mar, 2024

New terror wave

The time has come for decisive government action against militancy.
Development costs
27 Mar, 2024

Development costs

A HEFTY escalation of 30pc in the cost of ongoing federal development schemes is one of the many decisions where the...
Aitchison controversy
Updated 27 Mar, 2024

Aitchison controversy

It is hoped that higher authorities realise that politics and nepotism have no place in schools.