KARACHI: The stock market witnessed bloodbath on Wednesday when after a day of ‘dead cat bounce’ with the index showing a recovery of 1pc — mainly to snap the earlier seven-session losing spree — was rocked by a widespread fall that wiped out Rs127 billion from market capitalisation.
The index tumbled by 908 points, or 2.01 per cent, to break the barrier of 45,000 points and settle at 44,367. In the midst of massive selling pressure, the index fell by 1,299 points to intraday low 43,974 points.
Adjusted for the widely believed pumped-up index on Tuesday by 457 points, or 1pc, it has been short of 2,553 points, or 5.55pc, in nine consecutive sessions. Most market experts were unanimous in their belief that the bloodbath on Wednesday was triggered by the complexity of Pakistan’s relationship with the US.
The Senate bill in the US required assessment and imposition of sanctions on Taliban. Moreover, the bill requires an assessment of support by state and non-state actors, including Government of Pakistan. ‘The government is caught between a rock and a hard place’’ said a market watcher.
He stated that on the one hand the government had refused to follow the US line in regard to Taliban and Afghanistan, while on the other, it sorely required the next tranche of IMF programme.
The political worries were compounded by the relentless fall of the rupee which settled at new an all-time low against the dollar. Staggering rise in the international commodity market with coal now costing $190 a tonne did the remaining damage.
Sector-wise both the index heavyweight technology and financials fell and so did cement, E&P, O&GMCs, pharmaceuticals and fertiliser. Stocks that contributed negatively include TRG (88 points), MCB (61 points), The Searle (35 points), System (35 points) and Lucky Cement (35 points).
Foreign investors curbed the urge to buy while among local participants’ brokers were major purchases of equity worth $4.52m. The trading volume were up 28pc to 468.8m shares with Telecard on top of the list with 52m shares change hands.
Published in Dawn, September 30th, 2021