Market watch: Local bourse follows world markets, dives 315 points

KARACHI: The stock market plummeted to its lowest level in 10 weeks following massive battering of world markets amid unrest in the Middle East.

The Karachi Stock Exchange benchmark 100-share index was 2.64 per cent or 315.3 points lower at 11,711.29.

Earlier reports of foreign selling dented the already shaky confidence and local investors brought down their exposure across the board on domestic political worries and fear of foreign selling, said Elixir Securities equity dealer Faisal Bilwani.

US stock markets sank at the open on Tuesday as traders gave their first reaction to mounting turmoil in Libya. When markets opened after three days, the response to the violence in the oil-producing North African country was swift.

“The revolutions in Tunisia and Egypt are continuing to spread across the region. It seems to be Libya’s turn now. These developments cause a high degree of uncertainty,” Commerzbank analyst Ulrich Leuchtmann told Reuters.

The Italian stock exchange re-opened on Tuesday afternoon following a “technical” delay of more than six hours, a day after suffering its worst plunge of the year due to the unrest in Libya.

In the domestic market, Pakistan Oilfields was the worst hit, slipping Rs9.59 followed by Oil and Gas Development Company, down 3.3 per cent and Pakistan Petroleum Limited, down 1.4 per cent. Hub Power Company’s (Hubco) half-year earnings that remained flat at earnings per share of Rs2.46 were ignored by the market.

Indus Motor’s 34 per cent drop in net profit – in line with market expectation – caused a negative impact as the scrip fell 4.66 per cent to Rs263.53.

Trading volume improved a little to 101.5 million shares from 81 million shares with some participation at lower levels from large local mutual funds, according to analysts.

Askari Bank was the volume leader with 1.02 million shares, closing at its lower limit. The stock fell Re1 to end at Rs14.03.

It was followed by Bank of Punjab with 323,668 shares, falling Rs0.15 to close at Rs7.5 and DG Khan Cement with 234,557 shares, gaining Rs0.2 to close at Rs24.45.

Published in The Express Tribune, February 23^rd, 2011.