KARACHI: Selling spree continued for the fifth straight day at the stock market where the KSE-100 index took investors on a roller-coaster ride. Shares surged with the index making to intraday high by 342 points, followed by heavy profit booking at mid-day that dragged the benchmark down to intraday low of 514 points.

The last hour of trading saw the index bounce back a little to close with a loss of 300 points, or 0.66 per cent, at 45,297. In the five-day sell-off, the index has bled by 1,623 points, or 3.46pc.

Many market men were at a loss to explain the market trend. Could some participants be playing out the intense volatility as trading remained concentrated in speculative penny stocks?

One analyst said that the stronger dollar was the reason that the index took a turn for the worse. Investors’ sentiments were weighed down by the Finance Minister Shaukat Tarin’s comments on the introduction of measures to cool down an overheating economy.

Zulqarnain Khan, executive director at brokerage Next Capital Ltd, reckoned that the investors speculated on geopolitical issues going forward. Moreover, he said that market worried over the prerequisite of the IMF programme, the meeting for which would be held in the first week of October. Devaluation of the rupee; higher import duties, increase in power tariff and substantial rise in gas prices may be on the cards.

The SBP had also signalled monetary tightening to dissipate fiscal imbalances. The gaping hole in current account deficit created by the rapid rise in international prices of commodities was also of major concern.

Sector-wise, technology, banks, E&P, O&GMCs, fertilisers and refinery succumbed to selling pressure while cements offered some resistance. The trading volume declined 24pc over the previous day to 443.8m shares. WorldCall led the volumes with change of hands in 89m shares. Stocks that dragged down the index included TRG (64 points), PPL (27 points), MCB (27 points), System Ltd (27 points) and OGDC (26 points).

Published in Dawn, September 24th, 2021