Market watch: Political, border tensions lead to 948-point plunge at PSX

Benchmark index decreases 2.28% to settle at 40,655.37

KARACHI: The stock market slumped on Thursday as the KSE-100 index nosedived over 1,100 points in intra-day trading and closed below the 41,000-point mark.

The battering came as a result of growing tensions along Pakistan-India border and a detailed verdict issued in ex-president Pervez Musharraf case, which dampened investor sentiment.

Late on Wednesday, Indian army chief hinted that the situation at the Line of Control could escalate anytime, which prompted a quick response from the DG ISPR who said Pakistan would respond befittingly to any Indian misadventure or aggression.

Moreover, the death penalty imposed on former president Pervez Musharraf by the special court further dented the mood.

Analysts had earlier expected a correction in the market, citing overbuying in previous weeks.

In the morning, trading began with a short-lived spike but then the market continued to move downwards till the end of trading. Near the close of the session, the market saw a steep plunge and all the index-heavy sectors ended with a loss.

At close, the benchmark KSE 100-share Index recorded a decrease of 948.34 points, or 2.28%, to settle at 40,655.37.

"Fast growing tensions on Pakistan-India border have badly played on investors' mind," Arif Habib Limited Head of Equity Sales Saad bin Ahmed told The Express Tribune.

Moreover, the death sentence awarded to former president Pervez Musharraf by a special court of law also added to tensions on the political front, he said.

"We were thinking that the serving army chief's extension case was the biggest issue, which impacted the market but the recent decision in Musharraf's case is even bigger than the extension case," he said.

Thirdly, the market had become overbought and the correction was overdue. "Investors are aggressively offloading stocks ahead of the rollover week starting Monday," he said.

During the rollover week, investors settle positions after buying stocks with borrowed money by paying cash or rolling over the borrowing, the analyst added.

JS Global analyst Maaz Mulla said equities nosedived with the benchmark KSE-100 Index shedding 948 points and closing at 40,655.

The market remained choppy throughout the trading session as the detailed verdict in the high treason case against ex-president Pervez Musharraf was issued.

Oil and Gas Development Company (-2.9%), HBL (-2.6%), Hubco (-2.7%), Engro (-1.9%), Dawood Hercules (-4.5%), Fauji Fertiliser (-1.6%), Pakistan Oilfields (-2.9%), PSO (-2.7%), Pakistan Petroleum (-2.7%) and UBL (-2.1%) mainly contributed to the negative close of the index, the analyst added.

Overall, trading volumes dropped to 260.1 million shares compared with Wednesday's tally of 276.2 million. The value of shares traded during the day was Rs11.3 billion.

Shares of 364 companies were traded. At the end of the day, 33 stocks closed higher, 316 declined and 15 remained unchanged.

Unity Foods was the volume leader with 26.4 million shares, losing Rs0.45 to close at Rs14.7. It was followed by Hascol (R) with 13.2 million shares, losing Re1 to close at Rs11.17 and Fauji Foods with 12.6 million shares, losing Rs0.97 to close at Rs15.29.

Foreign institutional investors were net buyers of Rs242.9 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.