KARACHI – The KSE 100 index plunged 1.8 percent following massive declines in regional markets after the Japanese bourse plummeted. Rumors of foreign institutional investors selling off key oil and fertiliser stocks also dampened the morale of investors and dragged the index to touch a low of 11,768.
The KSE-100 index closed at 11,829.24 levels with a loss of 216.14 points, while total volume stood at 78,084,274 along with the total value of 4,982,157,632. KSE-30 index lost 292.01 points to close at 11,477.61 levels, and All Share index closed at 8,370.98 after losing 141 points
A large state owned fund was reportedly a buyer at lower levels in oil, fertiliser and chemical scrips contribute to recovery to a degree. OGDC bore the brunt of major selling pressure over rumors of foreign funds selling, while POL and PPL were also on the receiving end and were down 2.8 percent and 1.6 percent, respectively. Fertiliser stocks witnessed similar results with Engro leading the decline and closing down 2.9 percent.
ICI managed to close in the green primarily due to local institutional interest. The benchmark index after recovering 277 points during the intraday finally closed at a level of 11,829 after a brief recovery. Margin Trading Scheme (MTS) has failed to capture the imagination of investors as thin volumes were a prominent feature with 135 million shares traded during the day.
The fertiliser sector underperformed in comparison to the KSE index as investor chose to book gains after heavy gains during earlier sessions. Downward pressure amongst banking sector scrip was led by MCB, UBL and HBL. Investors remain cautious of a mild correction and fear of foreign outflows as the scale of the Japanese disaster becomes apparent which is likely to keep bourse under pressure
Looming macroeconomic and regional issues did prevent accumulation of scrips, mainly in stocks failing to sustain attained levels and are still trading at high levels. Although the economic support strategy unveiled by the government that includes imposition and increase in taxes and continued collection of taxes on the sale of fuel holds the potential of social unrest, entailing caution amongst investors.
The imposition of tough conditions set by IMF will certainly allow a smooth dispatch of tranche for reserve support, while a decline in inflationary pressure in the previous month made possible due to the stabilisation of oil prices, despite an increase in international prices and a mild decline in government borrowings will likely be highlighted in the upcoming monetary policy.
KSE feels the heat over Japanese disaster
