Market watch: Bourse continues to follow global downturn

Benchmark KSE-100 index drops 369 points.

KARACHI: The Karachi Stock Exchange (KSE) followed the global market trend and plummeted near the 11,000-point mark after a gap of almost 9 months amid panic selling. The stock market’s benchmark 100-share index dropped by 369 points or 3.24% to end at 11,034.92 points.

International market continued to plunge on US rating downgrade by S&P and fears of another global economic recession. Fall in global commodities such as crude oil falling near $78 and fear of possible foreign outflow affected investor sentiment, said Arif Habib Investments Director Ahsan Mehanti.

The fear that foreigners can also sell in the Karachi stock market due to continuous decline in regional markets forced local investors to dump shares, said Topline Securities equity dealer Samar Iqbal.

Foreign institutional investors were net sellers of Rs650 million worth of shares during the trade session, according to data compiled by National Clearing Company of Pakistan Limited.

Better than expected result of Pakistan State Oil also failed to lift the market sentiments. PSO announced earnings per share of Rs86.17 beating analyst forecast, but the payout of Rs2 failed to excite investors and the company stock slipped 4.5% to close at Rs205.67.

Engro Corporation remained out of favour and hit its lower limit of the day over news that Qadirpur gas field will remain shut for 20 days, according to JS Global Capital. However, Engro later confirmed that plant shut down will not result in any unanticipated losses and in fact was already a part of their agreement.

Trade volumes dropped to 69.1 million shares compared with the preceding day’s 106 million. Lotte Pakistan PTA was the volume leader with 5.98 million shares losing Rs0.72 to finish at Rs10.01.

Published in The Express Tribune, August 10^th, 2011.