KARACHI: The stock market extended its slump on Thursday as the KSE-100 index nosedived around 2,000 points in intraday trading, triggering a halt to activity and touching levels last seen in August 2019.
Nevertheless, market participants helped Pakistan Stock Exchange wipe off most of the losses and bounce back to close with a loss of 286 points.
Sentiment remained weak as the threat of a global recession and lockdown in the country and elsewhere sparked panic among investors.
The tally of coronavirus cases in the country soared past 300 and two deaths were reported, which wreaked havoc on the market. Moreover, a persistent decline in global stocks and crude oil prices also fuelled the bearish trend.
Asian stocks struggled to find their footing in volatile trade as the announcement of a stimulus by the European Central Bank failed to prop up markets significantly and the world struggled to contain the coronavirus pandemic.
The MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.25% amid choppy trade throughout the region, with Australia’s benchmark running 3% higher before turning flat and Korea’s Kospi gyrating.
Earlier, trading began at the PSX with a steep dip, which triggered a 45-minute halt during initial minutes. Following the resumption of trading, the KSE-100 index crept up steadily, thus erasing most of the losses. However, the index still closed with a loss of nearly 300 points owing to the dipping global equities.
At close, the benchmark KSE-100 index recorded a decrease of 286.22 points, or 0.94%, to settle at 30,129.83.
AHL Head of Research Samiullah Tariq told The Express Tribune that an overall weak sentiment, declining global equities and threat of a complete lockdown kept investors cautious.
“Investors adopted a ‘dump and run’ strategy as the market continued to face a free fall,” he said. “Worries over a major decline in the global GDP further added to the woes.”
A report of Arif Habib Limited stated that the KSE-100 index had lost 5,931 points in the last four trading sessions. It added that the index declined 0.9% (286 points) and closed at 30,130 on Thursday.
“In the past four consecutive sessions, the KSE-100 declined by 5,931 points (16.4%), which is the highest four-day decline in history,” it said. “However, in percentage terms, it is the largest four-day decline since October 12, 1998 (-19.1%).”
The market witnessed the sixth halt to trading in the past two weeks on Thursday, when the KSE-100 index dropped 1,562 points with trading in 8.5 million shares.
Buying activity was largely seen in fertiliser, banking and oil and gas sectors. The cement sector also saw buying activity initially, which lifted cement stocks from their lower locks to a tradable range, however, selling activity sent these stocks back to their lower circuits.
On the other hand, Alpha Beta Core CEO Khurram Schehzad said markets would continue to fall heavily. “Government and the State Bank of Pakistan will have to intervene and announce something other than usual,” he said. “These are not usual times. They must understand this before it is too late.”
Overall, trading volumes increased to 308.3 million shares compared with Wednesday’s tally of 186.7 million. The value of shares traded during the day was Rs10.1 billion.
Shares of 358 companies were traded. At the end of the day, 108 stocks closed higher, 235 declined and 15 remained unchanged.
K-Electric was the volume leader with 22.1 million shares, gaining Rs0.16 to close at Rs3.04. It was followed by Unity Foods with 19.3 million shares, losing Rs0.89 to close at Rs8.75 and The Bank of Punjab with 18.8 million shares, gaining Rs0.31 to close at Rs7.6.
Foreign institutional investors were net sellers of Rs851.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
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