KARACHI: The US threat to break off diplomatic ties over the ongoing diplomat case caused the bourse to plummet after Friday prayers, despite having commenced on a positive note after the four day consecutive bear run, and lost 244 points.
The negative trend was further amplified by rumors of the possibility that Moody’s could downgrade Pakistan’s rating due to its ballooning fiscal deficit. The bourse closed at 11,943 points. The market crash was resisted by only a few fundamentally strong stocks like LOTPTA and NCL who went down by a lesser fraction. The volumes on the other hand remained higher than yesterday, at 112 million with LOTPTA and NPL taking the top two spots. As far as results were concerned, ABL announced an above consensus EPS of Rs10.52 in its 2010 results, also paying a Rs 2.0 dividend and a bonus issue of 10 percent. However, the negative sentiment led it to close down 2.9 percent at Rs 68.79. Market analysts believe that market punters and fund managers are inclined towards offloading shares and wait for a better time to enter the market and when diplomatic links with the US normalise. It is apparently a common perception that investors want to remain unexposed given the rough patch benchmark and valuable stocks are facing.
The KSE-100 index closed at a level of 11,943.34 with a loss of 244.13 points while total volume stood at 77,165,863 along with the total value of 4,034,873,943. KSE 30 index closed at 11,535.33 after losing 246.60 points, and All Share index lost 163.32 points to close at a level of 8,495.98. Adding to the pressure was the likely repercussion of international ratings those are already sending alarming signals due to financial imbalance, and on financial standing of the country. The huge foreign holding in the index heavy weight OGDC, in case the rumor of a downgrade materialises leaves no option for investors other than to sell at the prevailing market rates. Hasnain Asghar Ali at Aziz Fida Husein said that update on the US reaction, on leverage products and the stance by various political parties regarding political setup will certainly be major concerns.
