- Analysts forecast further negativity in bourses, suggest investors to stick to ‘fundamentally strong stocks’
Political uncertainty in the country and falling oil prices in international markets crushed Pakistani bourses on Monday with Karachi Stock Market (KSE) 100-index nose diving by 1,419 points in a single day.
The KSE-100 index closed down by 1,420 points or 4.1 percent yesterday – the steepest fall since August 11, 2014 – when the market fell by 4.5 percent. The KSE-100 index closed at 33,100 points in the evening, compared with 34,519 points at the opening times.
The analysts have attributed the stock markets’ crash to the political uncertainty in Islamabad as Pakistan Tehreek-e-Insaaf (PTI) Chairman Imran Khan has announced for another sit-in outside the Election Commission of Pakistan (ECP) office. “The decision of de-seating the National Assembly speaker has created panic among the investors,” an analyst said.
“Beginning of futures roll-over week (August 2015 open interest at Rs 9 billion) and political noise, after the de-seating of National Assembly speaker by election tribunal also dented market sentiments,” said an analyst at Topline securities.
“Pakistan’s equity market was no different as investors further panicked after rupee depreciated by over 1 percent in the interbank market, following the trend of global currencies,” he added.
Moreover, Asian stocks plunged as the rout in the global equities deepened after US shares slumped and futures signaled further declines.
Meanwhile, the international oil market is continuously sliding and London crude oil was being traded in October sales at $44.73.
“The market took a nose dive today following downtrend in regional markets,” said an analyst at Invest Capital. “The negativity in the market can be attributed to consistent foreign selling throughout last week, with the trend continuing today as well,” he said.
“Today turned out to be ‘black day’ for KSE where all the top 100 companies of the index closed at limit down or near it,” analyst said. He further forecasted that negativity to continue in the bourses and investors are suggested to remain cautious and stick to fundamentally strong stocks.