Stocks stage sharp recovery after early losses

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KARACHI: The stock market took dramatic twists and turns on Wednesday guided by the hopes and apprehensions of escalation and de-escalation of hostilities with India. The KSE-100 index saw a loss of 128.98 points (0.33 per cent) to settle at 38,692.69.

It started with brokers receiving flurry of sell orders as TV screens flashed with news of shooting down two Indian jets that violated Pakistan’s airspace. Fearing a full-scale war, investors dumped stocks which saw the KSE-100 index tank by intraday low of 1,491 points.

But after DG ISPR Asif Ghafoor reasserted the country’s stance for peace, investors swooped in aggressive buying which saw the index stage a spectacular rebound.

Also Read: Stocks plunge 785 points amid border tensions

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Analysts at Topline Securities affirmed that it was the most prominent intraday recovery since July 28, 2017 – the day Supreme Court disqualified former Prime Minister Nawaz Sharif from office.

The major casualties of the day were small investors who were forced to sell on margin calls. According to figures National Clearing Company figures, individuals disposed of equity worth $5.85m. Mutual Funds, which had been quiet the earlier day, went on to reduce positions of net $2.87m to meet redemption calls as well as to shield their ‘’Capital protected funds’’.

However, banks and companies did not give in to fear and absorbed much of the selloff at rock bottom valuations. Banks bought shares worth net $3.67 and companies accumulated stocks worth $2.23m.

Sector-wise, oil and marketing companies, cement and automobile assemblers dragged the index down by 63 points. Major decliners were MCB, down 1.39pc, Oil and Gas Development Company 0.92pc, Indus Motor Company 3.38pc, K-Electric 2.81pc and Hinopak 4.72pc, taking away 75 points. On the flip side, Pakistan Tobacco, up 4.19pc, Pakistan Petroleum 1.20pc and Habib Bank 0.81pc added 69 points.

Published in Dawn, February 28th, 2019

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