The Karachi stocks market tumbled to what the analysts said “steepest” four-month fall Tuesday on the back of risk-averse investors’ concern for terrorists’ killing of at least 125 school children in Peshawar and a rout on the international equity market.
The stock analysts saw “major correction” on the day that witnessed KSE 100-share index nosedive by a huge 2.57 percent or 813.82 points to close at 30,876.28 points.
Showing a recovery of 100 points on Monday from the PTI’s agitation in Lahore, the benchmark index slid to the four-month low after August (2014) when the ‘volatile’ market had shed 1,309 points.
“This was the steepest fall after four months,” viewed analysts at Topline Research. In absolute terms, they added, the 813 points fall was not seen since August 2014.
The free-float KSE 30-share index too lost 590.34 points and ended at 19,972.84 points against 20,563.18 points of the previous session.
“Stocks nosedived after militants stormed military school in Peshawar killing over 125 children,” said Ahsan Mehanti, a director at Arif Habib Corporation.
The day’s bearish activity witnessed in stocks across the board amid higher trades during the rescue operations of the national tragedy, said the senior equity analyst.
The trading turnover on the ready-counter was recorded higher at 262.5 million shares compared to 215.5 million of Monday. Overall, value of the stocks traded surged to Rs 15.23 billion from the previous Rs 12.64 billion.
In total, the day saw stakes of 391 scrips changing hands with only 52 valuing up, 321 down and 18 unchanged. The market capital inched down to Rs 7.05 trillion from Rs 7.22 trillion.
With Bank of Punjab appearing as a volume leader by counting 29.5 million of its listed shares traded, the remaining nine best performers included Jahangir Siddiqui Company (11.4 million), Maple Leaf Cement (10.9 million), Pak Elektron (10.1 million), KASB Bank (9.4 million), Sui Northern Gas (9.1 million), Fauji Cement (7.5 million), Sui Southern Gas (7.3 million), Fauji Fertilizer (7.0 million) and Lafrag Pakistan (6.4 million).
The trading volume on the future market set in the green zone rising to 33.3 million shares compared to 23.89 million of the previous day. While Mehanti cited investors concern for major fall in Asian stocks after WTI crude prices broke below $ 54 as a catalyst for Tuesday’s 2.6 percent dip, analysts at Topline Research opined otherwise.
“Main reason, we think, for this is global stock market rout,” they said. While weak oil prices had led to uncertainty over global economic growth, more than 5 percent drop in China’s benchmark Shanghai Composite Index last week had triggered mega sell-off in global stock markets, said the analyst.
They said the MSCI Emerging Markets (EM) and MSCI Frontier Markets (FM) indexes had lost six and seven percent, respectively, since the month’s start. “Foreign Investors Portfolio Investments (FIPI) net selling of US$32mn in last seven trading sessions (Dec 5-15, 2014) clearly signals that Pakistan market is following global market trend,” they said.
All the countries exporting or importing oil are being affected, the analysts argued. Other factors which played as a catalyst Tuesday the analysts said included pending receivables in energy sector and a 48-hour deadline the agitating Pakistan Tehreek-i-Insaaf has set for the PML-N government to constitute a Judicial Commission to audit 2013 elections.
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