The stock market took a heavy battering on Tuesday and fell to a 12-week low, as the US broke off talks with Pakistan over Nato supply routes and recalled all its negotiators from the country. Investors abandoned positions as most had been banking on the resumption of supply routes for the release of Coalition Support Funds, the inflow of which was expected to help achieve stability in the sharply deteriorating rupee.
The Karachi Stock Exchange’s (KSE) benchmark 100-share index plummeted 1.26% or 171.90 points to end at the 13,429.56 points level.
“Cement and oil stocks fell sharply as investors believe that worsening Pakistan-US relations may affect the investment climate. Volumes also remained on the lower side … because most of the investors are on the sidelines due to the June closing,” said Topline Securities equity dealer Samar Iqbal. Trade volumes rose marginally to 71 million shares compared with Monday’s tally of 60 million shares. The value of shares traded during the day was a meagre Rs2.72 billion.
“Uncertain global stocks and fall in global commodities affected sentiments; despite hopes for ease in macroeconomic issues after China agreed to place $500 million with the State Bank of Pakistan to defuse pressure on the current account and depletion of foreign exchange reserves,” added Ahsan Mehenti, director at Arif Habib Corp.
“Cements witnessed the brunt of selling with Lucky and DG Khan Cement declining 4.6% and 2.0% respectively on rumours of foreign selling. The oil sector also remained under pressure as international oil prices took a dip yesterday: Oil and Gas Development Company, Pakistan Oilfields and Pakistan Petroleum all closed down 1.9%, 1.5% and 2.1% respectively,” reported Ahmed Rauf, analyst at JS Global.
Lucky Cement was the volume leader with 5.42 million shares losing Rs5.65 to finish at Rs117.37. It was followed by Jahangir Siddiqui Company with 5.36 million shares losing Rs0.41 to close at Rs14.08 and DG Khan Cement with 5.10 million shares losing Rs0.81 to close at Rs39.43.
Meanwhile, foreign institutional investors’ portfolio investments declined by a staggering Rs6.25 billion – or nearly $66.5 million – on Tuesday, according to data maintained by the National Clearing Company of Pakistan Limited.
Published In The Express Tribune, June 13th, 2012.