Benchmark KSE-100 Index loses 1.58% to finish trading at 40,978.23. PHOTO: FILE
Global equities' sell-off and a weak earnings outlook after the regulator recommended a 46% increase in gas prices forced investors to offload their stockholdings.
On the economic front, a downgrade of Pakistan's outlook by Moody's credit rating agency triggered the outflow of foreign funds.
At close, the benchmark KSE 100-share Index recorded a slump of 659.15 points or 1.58% to settle at 40,978.23.
Market watch: KSE-100 stays stagnant amid uncertainty over rupee-dollar parity
Elixir Securities' analyst Ali Raza said equities carried bearish momentum from the previous trading session with the benchmark index breaking the 41,000 resistance level and closing a stone's throw away from the 2018 low of 40,711.
He said the index traded in a positive zone for the first 90 minutes, but later recorded a sharp dip on aggressive selling reportedly by a few local asset managers while offloading by foreigners also continued unabated with index-heavy financial and cement stocks bearing the brunt.
Moreover, the regulator's proposal for raising gas prices also hit the market hard as higher tariffs would have negative implications for manufacturing sectors like cement (-4.3%), textile (-3.4%) and chemical (-2.1%) besides having a spillover effect on demand and inflation.
Even the oil and gas exploration sector (-1.7%) was not spared despite a 4% rise in international crude oil prices over the weekend following an Opec meeting.
"(We) expect weakness to persist and volatile trading in the near term with investors keeping a close watch on the ongoing FATF meeting, which will decide the fate of Pakistan," the analyst said.
"The ongoing amnesty scheme remains a key trigger - news reports suggest a hefty domestic asset declaration - that we believe can beef up capital market's liquidity going forward."
Market watch: KSE-100 ends positive as foreign investors turn net buyers
Overall, trading volumes decreased to 166.7 million shares compared with Friday's tally of 179 million. The value of shares traded during the day was Rs7.02 billion.
Shares of 362 companies were traded. At the end of the day, 58 stocks closed higher, 283 declined while 21 remained unchanged.
K-Electric was the volume leader with 18.7 million shares, losing Rs0.05 to close at Rs5.27. It was followed by The Bank of Punjab with 11.18 million shares, losing Rs0.29 to close at Rs12.15 and Pak Elektron with 7.8 million shares, losing Rs1.35 to close at Rs32.67.
Foreign institutional investors were net buyers of Rs232.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
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