Market watch: Stocks take a hammering as KSE-100 plunges 1,096 points

Benchmark index loses 2.51% to close at 42,498.86

KARACHI: As drama unfolded on the political front, the KSE-100 shed 2.51% for its biggest fall in 2018 with panic-induced selling causing the index to retreat close to 1,100 points on Monday.

The KSE-100 dropped from the moment trading began, as uncertainty over former prime minister Nawaz Sharif's comments on the Mumbai attacks and ongoing trial proceedings led to a dump-and-run approach.

Stocks across the board landed deep in red, as selling pressure was witnessed with investors panicking over the situation. A high-level meeting of the National Security Committee also aggravated matters.

At close, the benchmark KSE 100-share Index recorded a decrease of 1,095.93 points or 2.51% to settle at 42,498.86.

Elixir Securities' analyst Muhammad Arbash said equities witnessed a bloodbath on Monday with the benchmark KSE-100 Index closing deep in the red, recording the biggest daily decline since December 7, 2017.



"Market caved in to selling pressure as political noise in the country rose given civil-military tensions over ousted PM's remarks involving Mumbai attacks. Along with persistent foreign selling (net outflow of $8 MTD), uncertainty over macroeconomic indicators and lack of near-term positive triggers led the broader market to a meltdown," Arbash remarked.

Steels, cements and E&Ps were the worst three sectors of the entire market in terms of performance on the KSE-100 Index. Moreover, on the KSE-100 Index, just five stocks closed positive, 10 remained unchanged while 85 names closed in red.

"Out of those 85 names, 36 names closed at their respective lower price limits or fell by more than 4%. Meanwhile, turnover on benchmark Index increased by 27% versus this month's average," the analyst added.

MSCI is scheduled to announce the result of its Semi-Annual Index Review early morning hours on Tuesday. In case the index provider assigns a higher-than-expected weight to China-A Shares, the resultant pro-rata reduction in Pakistan's weight can dampen sentiments further.



"Barring any such negative surprises from MSCI, we recommend cherry picking to take advantage of the ongoing weakness in value plays."

Overall, trading volumes rose to 176 million shares compared with Friday's tally of 164.7 million.

Shares of 350 companies were traded. At the end of the day, 34 stocks closed higher, 305 declined while 11 remained unchanged. The value of shares traded during the day was Rs7.1 billion.

K-Electric was the volume leader with 12.1 million shares, losing Rs0.30 to close at Rs5.98. It was followed by First Dawood Bank with 8.8 million shares, gaining Rs0.08 to close at Rs4.10 and Bank of Punjab with 8.7 million shares, losing Rs0.47 to close at Rs11.24.

Foreign institutional investors were net sellers of Rs245.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.