KARACHI: Following the free-fall a day ago, stocks remained range-bound and in search of a direction on Thursday. The KSE-100 index attempted to claw back in early trade but profit-taking, mainly in banks, thwarted the effort.
Brooding investors who have watched the index slide in seven of the last eight sessions saw index extend losses by 147 points (0.40 per cent) to close at 34,887, breaching the 35,000 support level.
Lending their ears to rumours, investors liquidated intra-day trades with the index moving between the high and low by 265 and 206 points. Reports of near conclusion of the ongoing staff level parleys with the visiting International Monetary Fund team and a possible announcement, as early as on Friday, could not excite the market.
Investors braced themselves for tough terms decreed by IMF for the bailout, which analysts said could include increase in sales tax by one percentage point to 18pc and hike in interest rate by 100-200bps.
The government was thought to have decided to incorporate much of the new measures in the budget 2019-20 be announced after Eid.
The volume declined 31pc over the previous day to 78 million shares with traded value also receding by 18pc to $26.4m. Optimists reckoned that regardless of mundane activity, market appeared to be consolidating as prices had dropped to extremely attractive levels.
Sector-wise, profit-booking was seen in banks which contributed the highest 132 points to the index downside with most major banks closing in the red. Cement added 44 points as stocks closed stronger in anticipation of a possible deal between manufacturers over production cuts amidst slowdown in economic activity.
Major contribution to the index decline came from MCB, down 2.89pc, Habib Bank 2.08pc, Mari Petroleum 4.93pc, Nestle Pakistan 3.38pc and United Bank 1.52pc, taking away 162 points. On the flip side, Oil and Gas Development Company, up 1.33pc, Hub Power 1.53pc and Lucky Cement 1.75pc added 62 points.
Published in Dawn, May 10th, 2019