KARACHI: The stock market started the first day of the week on a positive note with the index clawing up by 73 points in the early hours. But it came under pressure as selling erupted from all sides, resulting in the KSE-100 index dropping 487 points, or 0.99 per cent, to close at 48,521.

Traders said the primary reason for the steep fall was the Securities and Exchange Commission of Pakistan’s (SECP) strict measures against in-house financing that have sapped liquidity from the market. “Moreo­ver, as month end looms, the rush to clear out debit balances further magnified the selling pressure,” said a dealer at a major brokerage house.

The problem was exacerbated by the uncertainty about the outcome of the Panama Papers case, heavy foreign selling and concerns over the law and order situation. Investors were not enthused by the end of a successful rollover of deliverable futures contract from February to March the previous week.

Market participants said the sentiment towards the steel sector was dampened as reports surfaced about the Lahore High Court granting interim relief to steel importers by temporarily suspending the collection of anti-dumping duty. This pulled down major steel stocks – Aisha Steel Mills, International Steels and International Industries – to their lower limits.

The volume decreased 9pc from the earlier day to 250 million shares while the value declined 18.4pc to Rs11.6 billion. As red was splashed across trading screens, 32 stocks closed on their lower limits while only 11 managed to hit their upper circuits. Major contribution to the downside came from DG Khan Cement 2.15pc, United Bank 0.99pc, Sui Northern Gas Pipelines 4.39pc, Hub Power Company 1.13pc and International Steels 4.89pc, taking away 114 points.

Pakistan Tobacco Company, which went up 5pc, added 14 points to the index.

Published in Dawn, February 28th, 2017