KARACHI: Stocks continued to receive hammering as the bearish trend persisted for the second successive session on Wednesday with the index plunging over 700 points in intra-day trading and finishing the day in the red zone.
The decline came on the back of deteriorating macroeconomic situation and a lack of positive triggers, which turned investors wary. The news about Pakistan being placed on the blacklist for alleged violations of religious freedom also dented sentiments.
Additionally, the dismal data of car sales led to selling pressure in automobile and related stocks.
Earlier, stock trading kicked off on a negative note, with the index continuing to spiral downwards, hitting an intra-day low of 38,130.07 points. However, after mid-day, buying momentum helped the index gain some ground, but it still finished the day negative.
At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 544.52 points or 1.4% to settle at 38,307.44.
Market watch: Stock market loses 448 points amid profit-taking
Elixir Securities analyst Murtaza Jafar said the benchmark index traded negative on reported selling by foreign institutional investors in index names after the US added Pakistan and some other nations to the blacklist for alleged violations of religious freedom.
"However, the US State Department later exempted Pakistan, Saudi Arabia and Tajikistan, but it failed to lift momentum at the local bourse," he said.
Financial stocks took the lead in the day's decline as they collectively contributed over 150 points to the fall in the benchmark index. Habib Bank Limited (-2.85%), United Bank Limited (-2.77%), MCB Bank Limited (-1.63%) and Meezan Bank Limited (-4.03%) closed deep in the red.
"[We] expect investors to await clarity on the IMF package along with a likely loan of around $2 billion from Chinese financial institutions," the analyst added.
Market watch: Bulls take charge as stocks gain 738 points
Overall, trading volumes increased to 145.6 million shares compared with Tuesday's tally of 124.01 million. The value of shares traded during the day was Rs6.9 billion.
Shares of 350 companies were traded. At the end of the day, 56 stocks closed higher, 278 declined and 16 remained unchanged.
Pak Elektron was the volume leader with 16.5 million shares, gaining Rs0.56 to close at Rs25.56. It was followed by K-Electric with 16.5 million shares, losing Rs0.15 to close at Rs5.78 and TRG Pakistan with 6.9 million shares, losing Rs1.09 to close at Rs24.69.
Foreign institutional investors were net sellers of Rs440.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.