Market watch: KSE-100 nosedives as lockdown fear spreads

Bears maintained a firm grip on the Pakistan Stock Exchange (PSX) on Monday as the benchmark index tanked nearly 2% amid fears over outcome of the second wave of the Covid pandemic.

Investors reacted with panic to the surging coronavirus cases, opting to offload shares on fears of imposition of another lockdown in Pakistan.

The KSE-100 index plummeted from the moment trading began and dived over 1,000 points to fall below the 39,000-mark. However, some buying activity in the later hours helped the index recover some lost ground, though it still finished deep in red. Weak investor sentiment restricted the index from entering positive territory.

The dip in global equity and oil markets also hampered progress at the Pakistan stock market. Investors worried that a lockdown in Europe would weaken fuel demand. Moreover, the upcoming US elections, due November 3, also added to investor woes as the uncertainty impacted trading at the bourse.

At close, the benchmark KSE-100 index recorded a decrease of 775.82 points, or 1.94%, to settle at 39,112.18 points.

BMA Capital Executive Director Saad Hashemy told The Express Tribune, “The market remained under pressure on Monday and last week due to rising Covid-19 cases both locally and globally.”

“Fears of another lockdown that would result in economic slowdown dented investors’ sentiment,” he added.

The analyst stated that reduction in international oil prices also led to depressed sentiments in oil stocks.

Pakistan Kuwait Investment Company Head of Research and Development Samiullah Tariq told The Express Tribune that the market performance remained subdued on the back of soaring Covid-19 cases.

“Investors fear that taking cue from other countries a lockdown will be imposed in Pakistan as well, which will dent process of recovery,” he maintained. “Even if a smart lockdown is imposed it will dent the economic recovery.”

“Moreover, international markets particularly oil, which was down, lent support to the already sinking index.”

Overall, trading volumes plunged to 322.3 million shares compared with Thursday’s tally of 541.8 million. The value of shares traded during the day was Rs12 billion.

Shares of 396 companies were traded. At the end of the day, 87 stocks closed higher, 294 declined and 15 remained unchanged.

Hascol Petroleum was the volume leader with 32.4 million shares, losing Rs1.07 to close at Rs13.82. It was followed by Unity Foods with 31.2 million shares, gaining Rs0.37 to close at Rs23.27 and Pakistan International Bulk Terminal with 20.2 million shares, losing Rs0.23 to close at Rs12.25.