Market watch: PSX crashes nearly 7% as pandemic batters sentiment

KSE-100 index falls 2,102.58 points to below 29,000 amid lockdown in provinces

KARACHI: Bears maintained a firm grip on the Pakistan Stock Exchange (PSX) on Tuesday as the benchmark index tanked nearly 7%.

After recording the worst loss since 2008 in the past week, the index plummeted even further as it breached the 29,000-point barrier when trading resumed after a three-day break.

The KSE-100 index dived as soon as trading began, falling nearly 1,900 points, which once again triggered a halt in trading activity, this time for two hours.

The Securities and Exchange Commission of Pakistan (SECP), in a statement, directed the PSX to begin trading at 11am from Tuesday onwards for 15 days as provinces went into lockdown.

It also stated that the trading halt would be for two hours in case the secondary benchmark KSE-30 index fell 5% and failed to recover in the next five minutes.

The downtrend came on the back of fears that a global recession was imminent as the coronavirus pandemic forced many countries across the world to go into lockdown. Policymakers across the globe were looking to stave off a deep economic freeze from the lockdown and travel bans through a slew of monetary and fiscal measures.

Even after the two-hour pause, there was no recovery and the KSE-100 index plunged further, hitting a low of 28,565 points.

At close, the benchmark KSE-100 index recorded a decrease of 2,102.58 points, or 6.86%, to settle at 28,564.83.

“The KSE-100 index slumped by 6.9% (down 2,103 points) and closed at 28,565, the lowest level since September 1, 2014. This is the highest day-on-day decline in percentage terms since May 20, 2002 (-7.5%),” stated Arif Habib Limited (AHL) in its report.

AHL Head of Equity Sales Saad bin Ahmed told The Express Tribune that investors were jittery due to a global meltdown and potential devastating impact on local businesses due to the shutdown of activities in almost the entire country.

“Recovery of businesses, despite the announcement of a package, looks a distant possibility, which is causing investors to en cash their positions. Cash is certainly the king in these desperate times,” he added.

Meanwhile, AHL Head of Research Samiullah Tariq was of the view that the market was bearing the brunt of a near-lockdown in the country as well as halt to economic activities in other countries.

The market saw selling pressure across the board.

JS Global analyst Maaz Mulla said the stock market opened in free fall as the index plummeted over 2,157 points in intra-day trading, mirroring the behaviour of global equity markets amid deepening corona fears.

“The drastic fall not only triggered a two-hour long trading halt but also pushed the KSE-100 well below the 29,600 level.”

Moreover, the number of confirmed COVID-19 cases in Pakistan crossed 900 as provinces go under lockdown. Major decliners of the day were ENGRO (-7.5%), HBL (-7.5%), HUBC (-7.5%), MCB (-7.5%), FFC (-7.5%), OGDC (-7.1%), PPL (-7.5%), UBL (-7.5%), LUCK (-7.5%) and BAHL (-7.5%).

Traded value declined by 71% to $16 million while volume stood at 99 million shares, down 60%.

“Going forward, we expect market to remain bearish as the coronavirus situation prevails across the globe and recommend investors to remain cautious,” he added.

Overall, trading volumes decreased to 98.8 million shares compared with Friday’s tally of 245 million. The value of shares traded during the day was Rs2.5 billion.

Shares of 285 companies were traded. At the end of the day, 24 stocks closed higher, 253 declined and eight remained unchanged.

K-Electric was the volume leader with 25.6 million shares, losing Rs0.34 to close at Rs2.65. It was followed by Unity Foods with 11.9 million shares, declining Rs0.82 to close at Rs7.89 and The Bank of Punjab XD with 9.6 million shares, losing Re1 to close at Rs7.01.

Foreign institutional investors were net sellers of Rs180.5 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.