805-point plunge pushes index to three-year low
KARACHI: Bloodbath was witnessed at the stock market on Friday as the KSE-100 index took a major dip of 805 points (2.4 per cent) and closed at 33,971 — the level last seen in March 2016.
The market, which saw the erosion of its capitalisation by Rs134 billion on Friday, was rattled by the overnight devaluation of the rupee and the dreadful prospect of State Bank further tightening the monetary policy on May 20 through a hike in policy rate by 50-100 basis points to curb aggregate demand and ensure microeconomic stability.
As panic selling was seen across the board with dozens of shares hitting their lower locks; value buyers waited for more bleeding to buy at deeper discounts. The index sank to intra-day low by 965 points, before rebounding a little in the last hour.
Volumes declined further from 109 million shares to 90m shares (down 17pc day-on-day). Traded value also declined by 19pc to $20.8m. Stocks that contributed significantly to the volumes included K-Electric, Pakistan International Bulk Terminal Ltd, Unity Foods, Bank Of Punjab and Hub Power Company (HUBC) (right shares), which formed 37pc of the total volumes.
Sector-wise, exploration and production (EP) contributed the most — 161 points to the index downside while fertilisers lost 159 points and oil and gas marketing companies were down 68 points. Cement sector, which shed 66 points, was beaten up for the second consecutive day with all major shares: D G Khan Cement, Cherat Cement Company, Pioneer Cement, Maple Leaf Cement Factory and Fauji Cement Company Ltd, closing down.
EP sector remained under the hammer where Pakistan Oilfields Ltd (POL) down 3.3pc, Pakistan Petroleum Ltd (PPL) 2.8pc and Oil and Gas Development Company (OGDC) 2.3pc closed with losses. Banking sector also lost 87 points with Habib Bank Ltd and United Bank Ltd settling in the red.
Scrip-wise, Fauji Fertiliser Ltd was down 4.73pc, PPL 2.84pc, Engro Corporation 2.95pc, OGDC 2.25pc, POL 3.25pc, Engro Fertiliser 3.34pc, MCB Bank Ltd 1.65pc, Bank Al Habib Ltd 1.7pc and HUBC 1.64pc contributed the most to 100 index decline. For the outgoing week, the index lost 1,549.91 points or 4.46pc.
Published in Dawn, May 18th, 2019