Market watch: Stocks sink 244 points on panic selling

KARACHI: The stock market opened on a positive note but news in the second half of the trading session regarding tensions escalating between Pakistan and the US along with Moody’s scare sparked panic among investors.

The Karachi Stock Exchange benchmark 100-share index ended two per cent or 244.13 points lower at 11,943.34.

Rumours about removal of Ambassador of Pakistan to the United States Hussain Haqqani popped up in the media, although the embassy denied this later, said Topline Securities equity dealer Samar Iqbal.

Pakistan is working to defuse tensions over the fate of Raymond Davis, a US official arrested for killing two men in Lahore on January 27.

The negative trend was further amplified by news of the possibility that Moody’s – a credit rating agency – could downgrade the country’s rating over the ballooning fiscal deficit, added Iqbal.

The number of shares traded rose to 111.76 million shares from Thursday’s tally of 89.82 million shares.

Result announcements by Allied Bank Limited and Nishat Power Limited (NPL) also failed to boost dampened sentiments, added Iqbal.

Allied Bank announced a dividend of Rs2 and a bonus share issue of 10 per cent. The stock closed down 2.9 per cent at Rs68.79.

NPL posted a net profit after taxation of Rs1.21 billion, which represents earnings per share of Rs3.42

The value of shares traded during the day was Rs4.47 billion. Lotte Pakistan PTA was the volume leader with 11 million shares, losing Rs0.25 to finish at Rs15.93. It was followed by Nishat with 5.77 million shares, falling Rs0.49 to close at Rs16.79 and Fauji Fertiliser Bin Qasim with 5.68 million shares, losing Rs0.36 to close at Rs40.85.

The market is expected to be directed next week by news flow about US-Pak relations, however, earnings announcements lined up for the latter half of the week will bring some respite, said Elixir Securities equity dealer Faisal Bilwani. Shares of 369 companies were traded on the last trading session of the week. At the end of the day, 102 stocks closed higher, 246 declined and 21 remained unchanged.

Published in The Express Tribune, February 12^th, 2011.