Stocks lose 314 points on economic concerns

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KARACHI: Shares continued to tumble for the fourth successive day with the KSE-100 index recording a drop of 314.13 points (0.92 per cent) and close at 33,774.43 — falling below the 34,000-level after 21 trading sessions.

The investors’ concerns were mounting inflation with June CPI initial figure at 9.5pc, giving rise to fears over additional interest rate hike in the next Monetary Policy Statement which could further curtail economic growth. Sentiments were also spoiled by the Fitch Solutions which cut the Pakistan’s economic growth forecast for 2019-20 to 2.7pc, from 4pc.

Also Read : Index ends flat on currency depreciation, gas tariff hike

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After making a high of 173 point’s, the index lost steam and dropped to a low of 567 point’s as increase in taxation and gas prices weighed in on industrial sectors. The federal government approved rise in gas tariffs by up to 191pc and electricity prices by Rs1.50 per unit to comply with the International Monetary Fund conditions.

Investors held their breath as IMF executive board is scheduled to meet on July 3 to consider three-year ‘extended fund facility’ of $6 billion for Pakistan.

The overwhelming concern was the relentless fall in the value of rupee against the dollar. Sector-wise, fertilisers were major laggards with Fauji Fertiliser down 3pc, and Engro Fertiliser 2pc. Among automobiles, Honda Atlas Cars fell 4pc and Pak Suzukli hit its lower lock. Banking sector saw price erosion in heavyweights Habib and United Bank, with the former hitting its recent lows.

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The volume decreased 15pc to 135 million shares, from 159.6m while traded value also declined by 7.5pc to $27.9m.

Stocks that contributed negatively included Pakistan Petroleum, decreasing by 44 points, Fauji Fertiliser 40 points, Habib Bank 35 point’s, Hub Power 29 point’s and Engro Corporation 23 points. Scrips that prevented more losses included Indus Motor, increasing by 10 points, Meezan Bank 9 points, Fatima Fertiliser 8 points, Abbott 7 point’s and Habib Metro 7 points.

Published in Dawn, June 28th, 2019

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