KARACHI: Bears ran amok for the second day at the stock market where the KSE-100 index extended losses by 281.33 points (0.82 per cent) and closed at 34,190.62 on Tuesday.
In the absence of positive triggers, worries over several issues weighed on the investors’ mind. Major index heavyweight sectors which included banks, exploration and production, cement and auto were badly battered.
Investors thought prudent to dump stocks based mainly on gas as fuel as they thought the higher costs of gas resulting in higher production may not be possible to pass on to the consumers amidst lower aggregate demand.
Grim economic outlook; investors’ concerns over the possibility of downgrade of Pakistan to Frontier Market Index from Emerging Market in the MSCI annual review due this week and government’s resolve of launching strict action against non-filers and tax evaders after the end of amnesty scheme spooked investors.
Negative sentiments were also fuelled by the statement of the outgoing Financial Action Task Force (FATF) president that Pakistan has failed to implement the action plan and there is a possibility of it being placed in the FATF Black List in October.
The sentiments were further dampened by the heated atmosphere on the political front where the government and opposition were on a collision course.
Despite a dismal market shares in steel, fertiliser and Sui utilities managed to perform relatively well.
The index dipped to intra-day low by 487 points, but saw major recovery of 200 points in the last half hour as investors picked up oversold stocks.
In the banking sector, Bank Al Habib Ltd, MCB Bank Ltd, Meezan Bank Ltd and United Bank Ltd went downhill while on the cement sector, Lucky, D. G. Khan and Maple Leaf closed in negative territory despite reports of price increase in the north.
Pakistan Petroleum Ltd (PPL) and Pakistan Oilfields Ltd were the major laggards in exploration and production sector on drop in international oil prices.
Stocks that contributed positively included Engro Fertiliser adding 10 points, Phillip Morris Pakistan Ltd 10 points, Mari Petroleum 7 points, HBL Growth Fund 6 points and Bank of Punjab 5 points.
Stocks that contributed negatively included Hub Power Company down 30 points, Pak Tobacco 29 points, Nestle 23 points, Fauji Fertiliser 21 points and PPL 21 points.
Published in Dawn, June 26th, 2019