A negative trend set by Engro dominated the bourse, both on financial and fundamental infra-structural issues, duly followed by a sell-off in high priced stocks with hopes of a change in CGT mode worried investors offered frontline high priced stocks at available rates.
With the mercury rising, an absence of buyers triggered a panic sale. Therefore, despite backup support from Nestlé (extending support of 25 points on 57 shares traded), the benchmark witnessed a triple digit loss with Engro hitting lower lock early during the session.
The KSE-100 index closed at 12,165.98 with a loss of 195.34 points and the total volume stood at 39,293,155 along with the total value of 2,627,276,931. KSE 30 index lost 240.07 points to close at 11,528.91 level and All Share index closed at a 8453.05 level after losing 135.23 points. 35 scrips advanced, 213 declined and 96 remain unchanged out of total 344 scrips traded.
Although various frontline stocks, which continue to offer consistent payouts and stand strong on the growth track and invite equity funds with limited options, the impact on the mentioned stocks was restricted, thereby disallowing a wider effect. While stocks under various threats of those companies facing expensive debt, the impact of gas curtailment, high input cost, declining exports and local demand did invite a sell-off. Despite price variations and tax relief, circular debt has negatively affected cash flows and has reduced production and dividend paying capacity of companies.
Companies facing serious liquidity issues due to asset and financial mismanagement (that has been covered under the head of circular debt) and a decline in oil and gas output (likely to be reflective in upcoming results) leave lesser options for equity market participants. However, various stocks available at lower prices which are likely to be witnessed in upcoming sessions, may offer short term trading opportunities, said Hasnain Asghar Ali at Aziz Fidahusein.
