KARACHI – The KSE-100 Index tumbled a massive 315.30 points spurred by massive battering of world markets, led by unrest in the Middle East. All major sectors closed in the red zone. Market rumours of foreign funds selling took its toll as investors had kept a vigilant eye on the deteriorating local political scenario after PPP and the PML (N) failed to reach consensus on economic reforms.
Weakened local sentiments were supplemented by foreign investors offloading their holding, leaving the benchmark index slid southward throughout the trading session. The KSE-100 index closed at 11649.38 points, while total volume and total value stood at 74,662,237 and 3,749,803,987 respectively. The KSE-30 index dwindled 342.53 points to close at 11185.31 levels, while the All Share index closed at 8318.69 following a loss of 212.72 points.
POL was hit badly as it slipped Rs 9.59, followed by OGDC (down 3.3 percent) and PPL (down 1.4 percent). Among the fertiliser stocks, ENGRO and FFC bore the brunt of selling pressure, dwindling 3.1 percent and 4.4 respectively. Volumes improved slightly and reached 101.5 million shares, following some participation on the lower levels from large local mutual funds. LOTPTA led the volume leader’s board followed by BOP and FFBL. Local investors were also wary of the deadline on PML-N’s 10-points reform agenda, due tomorrow.
As the result season is approaching the finish line, sustainability of the benchmark index at current level appears week amidst lack of triggers. Investors should remain cautious as improvement in economic fundamental still awaits resolution of concerns over implementation of needed reforms. Since high priced stocks are still closely held by the syndicate of local business groups, active from both local and off-shore accounts, the recent decline cannot be termed a free-fall, incase the situation on various sensitive fronts persists.
Hasnain Asghar Ali at Azizfidahusein said that since various main board stocks are still trading at higher multiples and have so far failed to invite buyers on intervals, low volume price erosion might be a common feature in upcoming sessions. However, stocks offering consistent dividend yields did attract equities specific funds from both retail and corporate fronts, while others without binding opted for foreign currency hedge, thereby relatively increasing the rate of return.
Moreover, high priced stocks, despite increasing chances of technical recovery that duly increases with adjustment in share price, had sellers cued-up at prevailing levels, while highly leveraged and those highly dependent on economic development failed to invite buyers even at substantial discounts.
