Market watch: KSE-100 plunges over 1,200 points before minor recovery

At close, benchmark index loses 995.66 points at 39,288.48

KARACHI: Even before trading began, investors and traders knew it was going to be a tough day for the stock market.

Expectations were met as less than halfway into the session, the KSE-100 Index plunged over 1,000 points or almost 2.5% with market participants adopting a dump-and-run approach even as valuations reached attractive levels. It later hit an intra-day plunge of over 1,200 points as panic selling continued.

Index-heavy banking, cement and oil sectors were hit and all major scrips lost value. The Supreme Court's order of summoning heads of three private banks in a case about suspicious transactions took its toll on market participants that saw further upheaval in the political sphere ahead of the elections on July 25.

UBL, one of the three banks, was nearing its lower price limit after having lost Rs7.33 or 4.5%. Summit Bank, also named in the order, shed close to 14% of its value in intra-day trading.

Market analysts say stocks will continue to remain under pressure in the near term as former prime minister Nawaz Sharif and his daughter return to the country after being handed jail sentences by an accountability court hearing the Avenfield properties reference.



With the Federal Investigation Agency (FIA) naming former president Asif Ali Zardari and his sister Faryal Talpur as beneficiaries in a money-laundering case, political upheaval is set to continue.

At close on Monday, the benchmark KSE 100-share Index recorded a decrease of 995.66 points or 2.47% to finish trading at 39,288.48 - the lowest level of 2018.

Elixir Securities' analyst Muhammad Arbash said equities endured the third largest daily decline of the year 2018.

"Politics was much to blame for Monday's fall as sentiments were dented after the Supreme Court barred key politicians and bankers from travelling abroad due to their possible involvement in money laundering," he said.

"Moreover, increasing uncertainty over macros and persistent selling by local asset managers added to the market plight."



The decline was broad-based with cement (-4.1%), pharmaceutical (-4%) and bank (-2.8%) stocks denting the benchmark index the most.

"[We] expect political noise leading up to the general elections and prevailing weak macros to keep any meaningful recovery in check in the near term," he added.

Overall, trading volumes increased to 123.6 million shares compared with Friday's tally of 103.9 million. The value of shares traded during the day was Rs5.3 billion.

Shares of 334 companies were traded. At the end of the day, 30 stocks closed higher, 286 declined while 18 remained unchanged.

K-Electric was the volume leader with 11.9 million shares, losing Rs0.30 to close at Rs5.28. It was followed by The Bank of Punjab with 8.4 million shares, losing Rs0.54 to close at Rs11.12 and Lotte Chemical with 5.8 million shares, losing Rs0.60 to close at Rs11.19.

Foreign institutional investors were net sellers of Rs119.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.