KARACHI: Stocks snapped three-day winning streak on Thursday as the KSE-100 index plunged 325.93 points (0.93 per cent) and closed at 34,570.62.
The day represented the classic case of old Wall Street adage: “Buy on Rumour, Sell on News”.
The expectation of approval of International Monetary Fund (IMF) Executive Board’s signing of the loan package to Pakistan that had sparked interest in the market, materialised a day earlier.
In early trade, it sent the index soaring to intra-day high by 383 points. But the index could not hold on to the gains and succumbed to selling pressure as economic malaise and the political noise prompted investors to take profit.
The index thus went into a downward spiral and landed at intra-day low by 430 points. Banks sold stock worth $1.38 million and insurance companies trimmed their portfolio by $2.18m.
The liquidity was mopped up by foreign investors who bought stocks worth $2.95m.
Investors remained shaky over the direction of the market going forward. Besides the worries over the dwindling GDP numbers, protests by several sections of business and industry over the budgetary measures took their toll on the market.
Reports of tax amnesty scheme fetching more than Rs70 billion and declaration of over 140,000 properties till the expiry of the deadline of Asset Declaration Scheme, 2019, could not cheer the market.
Sectors which had led the previous bullish run came under severe selling pressure including the cement, steel and fertiliser.
Among cements, D.G. Khan closed near its lower lock while Maple Leaf, Pioneer and Lucky (LUCK) also ended in the red.
Selling erupted in the gas utilities in last half an hour where Sui Southern Gas Company and Sui Northern Gas Pipelines (SNGPL) closed near their respective lower locks.
Other sectors that contributed to the index downside included exploration and production, oil and gas marketing companies and pharmaceuticals.
Scrip-wise, major losses were contributed by Oil and Gas Development Company down 33 points, LUCK 33 points, Pakistan Petroleum Ltd 24 points, Pakistan State Oil 20 points and SNGPL 19 points.
Published in Dawn, July 5th, 2019