Stocks plunge 605 points on exchange rate fears
KARACHI: Stocks tumbled on Monday with the KSE-100 index recording loss of 605.23 points (1.50 per cent) to close at 39,665.77.
The spike in prices of index stocks noted in the last two days of the outgoing week was extended as the market after opening in the positive made intraday high by 190.94 points, underpinned by the policy rate increase of 100bps by the State Bank of Pakistan on Saturday.
Although banking scrips garnered investor interest, the decision left a negative impression across other sectors and their valuations. Selling by institutions was mostly at the lower end of the range in blue-chip stocks.
Investors were taken by surprise as the rupee fell sharply against the dollar in what appeared to be another round of devaluation by the central bank. In the interbank market, the greenback was trading at around Rs128 just before the close of Pakistan Stock Exchange.
In her visit to the stock market on weekend, finance minister Shamshad Akhtar had given no hint of a further devaluation. Political noise and the deteriorating economic indicators kept investors on the sidelines, represented by a flattish rise of 2.5pc in traded value of stocks.
On the political front, the Sharifs challenged their convictions in the Avenfield corruption reference in the Islamabad High Court.
Steel, autos and cement witnessed renewed selling pressure by local funds on concerns of lower than expected earnings in 2018-19. The index sank to intraday low by 869.9 points.
Sectors contributing to the decline included banks, lower by 155 points, cement 124 points, oil and gas marketing companies 75 points, fertiliser 74 points and tobacco 37 points.
Major gainers included United Bank, increasing by 33 points, Pakistan Petroleum 15 points, Colgate-Palmolive 14 points, Faysal Bank 8 points and Mari Petroleum 7 points. On the other hand, Habib Bank was down 2.32pc, Lucky Cement 4.15pc, Pakistan State Oil 4.59pc, Engro Corporation 2pc and Oil and Gas Development Company 1.76pc, taking away 223 points.
Published in Dawn, July 17th , 2018