Market watch: Stocks drop hard on political tension

Benchmark KSE-100 index falls 102 points.

KARACHI:

The stock market plummeted on Tuesday following tensions after Muttahida Qaumi Movement decided to once again quit the coalition government.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index dropped 0.82 per cent or 102.05 points to end at 12,362.44 point level.

Heated political environment triggered the long-awaited slump, which was accumulated due to stagnation, said Aziz Fidahusein and Company Research Head Hasnain Asghar Ali.

Fears of delay in Coalition Support Fund also dented investor sentiments as the delay is likely to push budget deficit higher to 5.3 per cent of Gross Domestic Product.

Trade volumes increased to 67 million shares compared with Monday’s tally of 53 million shares.

Local institutional investors remained sellers in the market due to portfolio adjustment phenomenon witnessed at year-end, according to analysts. All major oil, fertiliser and cement shares closed in the red with no support in sight.

Engro resumed its slide as curtailment of gas and its effect on Engro’s financials continue to hamper any fresh liquidity.

Nishat Mills followed similar fate as it continues to lose grounds despite declining by 20 per cent in value recently on rumours of inventory losses and lack of export orders in the eurozone owing to trade restrictions.

The value of shares traded during the day was Rs2.6 billion.

TRG Pakistan was the volume leader with 7.15 million shares losing Rs0.02 to finish at Rs2.58. It was followed by Lotte Pakistan PTA with 6.31 million shares declining Rs0.4 to close at Rs14.01 and Hub Power Company with 3.73 million shares falling Rs0.12 to close at Rs37.19.



Published in The Express Tribune, June 29^th, 2011.