The capital market on Monday came under massive selling pressure amid mounting border tensions with India on the passing of presidential order to scrap the constitutionally mandated special status of Kashmir, dealers said. index
Analyst Ahsan Mehanti from Arif Habib Corporations said, “Panic selling was witnessed at PSX on global equities sell off amid US-China trade tensions.” Dismal data of 10.3 percent CPI Inflation in July 2019, falling global crude oil prices, investor concerns over economic uncertainty, as well as Pakistan-India cross border tensions played a catalytic role in the bearish close, Mehanti added.
Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 1.53 percent or 485.61 points to close at 31,180.80 points level. KSE-30 shares index followed suit with a low of 1.77 percent or 266.20 points to end at 14,78570 points level. Of 314 active scrips, 66 moved up, 227 retreated, and 21 remained unchanged. The ready market volumes stood at 52.009 million shares, as compared with the turnover of 46.453 million shares in the previous session.
Faisal Shaji, strategist at Standard Capital, said, “India’s belligerence on Kashmir took a toll on market sentiments.” Otherwise there was a view that market was ripe for “long-term investment”, given attractive company dividend yields.
“We may see bulls coming once sanity prevails,” he added. Salman Ahmad, head of institutional sales at Aba Ali Habib, said, “Tension on borders and development on Kashmir issue gave set back to investors.”
Moreover, reports that Rs20 billion market support fund has been delayed gave another shock to the investors. Until there was some clarity from the government over the economic policy, especially an announcement that now the benchmark interest rate would not move up, the current sagging trend would continue, Salman added.
From the word go, the panic button was pushed and the index in the early hour of trade slipped by 300 points. The Indian cabinet revoked the special constitutional status of occupied Kashmir through a rushed presidential order.
With the special status repealed, people from rest of India would now have the right to acquire property in occupied Kashmir and settle there permanently. This sparked uneasiness, as the decision would raise the temperature in the region leading to some conflict. The market which was already in search of good development came under hectic selling pressure with the index reaching a session low of 30,978 points.
However, resistance from some investors helped market recover marginally, sailing above the 31,000 mark. The uncertainty on government’s reaction to India left investors unguarded. Market would recover only on technical grounds, an analyst said, while warning about any recovery in coming days.
The highest gainers were Nestle Pakistan, up Rs199.00 to close at Rs5,899.00/share, and Ismail Industries, up Rs14.57 to finish at Rs365.00/share. Companies that booked highest losses were Siemens Pakistan, down Rs28.00 to close at Rs562.00/share, and Indus Motor Company, down Rs20.99 to close at Rs1,109.61/share.
Maple Leaf recorded the highest volumes with a turnover of 4.838 million shares. The scrip lost Rs0.19 to close at Rs17.03/share. The lowest volumes were witnessed in WorldCall Telecom, recording a turnover of 1.297 million shares, whereas the scrip lost Rs0.03 to end at Rs0.55/share.
(This news/article originally appeared in The News on August 6th, 2019)