Market watch: KSE-100 takes battering, plunges below 49,000

Benchmark KSE 100-share Index falls 991.53 points

KARACHI: Stocks took a battering on Monday, with the KSE-100 Index - a benchmark for market performance - plunging over 1,100 points in intra-day trading.

Barely two sessions after surpassing the coveted 50,000-point barrier and settling in on a record high on Thursday last week, the KSE-100 Index corrected with over a 200-point fall the next day to slip below 50,000 on Friday.

On Monday, a brief bullish run, which saw the index cross 50,300, was followed by a massive plunge that saw the index drop below the 49,000 level.

Across-the-board selling and profit-taking were attributed as the reasons for the massive fall.

At close, the Pakistan Stock Exchange’s (PSX) benchmark index ended with a fall of 1.98%, or 991.53 points, to end the day’s trading at 48,972.24.



Elixir Securities analyst Faisal Bilwani said equities corrected on the first trading day of the week on panic amid rumours of aggressive action by the Securities and Exchange Commission of Pakistan (SECP) against brokers that were warned recently over compliance issues primarily related to financing.

“Stocks opened positive as Oil & Gas Development Company (OGDC, +1.6%) led the gains in early trade after governemnt's decision to defer planned 5% stake sale,” said Bilwani.

“This move possibly pushed investors to cover back positions sold earlier in hopes of squaring lower as part of the deal.

“The wider market witnessed a steady decline on reports of institutional sellers while panic gripped mid-day on rumours of SECP action against brokers on non-compliance.

“Sharp swings and trading range of over 1,500 points tested nerves and kept value hunters at bay as interestingly and unlike most previous declines; no major support was seen on the downtrend.

“K-Electric (KEL, -3.9%) led volumes and was hit hard after testing record high on Friday as investors booked gains while wider market saw a significant decline in volumes that were lower by 31% vs previous week's average.”



JS Global analyst Nabeel Haroon said the market opened on a positive note, however, heavy selling was witnessed in the market by skeptical investors as the index lost 991 points during the day.

“Fauji Fertilizer Bin Qasim Ltd (FFBL) lost value to close on its lower circuit as the fertiliser company declared disappointing result for the year 2016. In its result company posted earnings per share of Rs1.43/share against market expectation of Rs1.92/share. This year’s end result was accompanied by a 5% final cash dividend.”

Major index movers were Lucky Cement (-3.12%), Hubco (-2.86%) and UBL (-1.78%), said Haroon.

Trading volumes fell to 389 million shares compared with Friday’s tally of 597 million.



Shares of 430 companies were traded. At the end of the day, 84 stocks closed higher, 335 declined while 11 remained unchanged. The value of shares traded during the day was Rs20.3 billion.

KEL was the volume leader with 54.7 million shares, losing Rs0.42 to finish at Rs10.25. It was followed by Aisha Steel Limited with 19.4 million shares, losing Rs0.87 to close at Rs23.17 and TRG Pakistan Limited with 17 million shares, losing Rs2.86 to close at Rs54.47.

Foreign institutional investors were net buyers of Rs487 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.