Market watch: Stock market dips as foreign investors spark sell-off

Benchmark KSE-100 index falls 423 points.

KARACHI: The stock market dropped more than 400 points as investor panic led to massive selling, with Hub Power Company hitting its lower lock during the day.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 1.92% or 423.25 points to end at 21,657.22 points.

“Pakistan equities had another red day with index-heavy energy names pulling the KSE-100 to close near 21,650. The day started slow and stocks traded directionless as news of the International Monetary Fund (IMF) lowering growth targets for the country dented sentiment, however selling mainly in Hub Power (HUBC PA –5%) primarily from foreign institutions and stock trading high volumes at lower lock, spooked investors with broader market failing to hold ground,” said Faisal Bilwani of Elixir Securities.



“Heavyweight financials followed suit in the absence of any serious buy interest with MCB Bank (MCB PA -2.3%) and United Bank (UBL PA -2.5%). Pakistan State Oil also was under pressure as news over the circular debt gained focus,” Bilwani added.

“KSE-100 Index witnessed a mid-week correction where the index made a low 21,632 points. Absence of interest from high net worth individual investors and institutions widened the spread between buyers and sellers which hurt the volume,” said Fahad Ali of JS Global.

“HUBC closed down by 5% on rumours of foreign selling in the stock, further dampening the market sentiment and dragging the index south. With only three trading sessions left before Eidul Azha holidays, we expect the market to remain range bound with low volumes and suggest investors to take positions in fundamentally valued stocks at lower levels,”Ali adds.



Trade volumes rose to 123 million shares compared with Tuesday’s tally of 93 million shares.

Shares of 335 companies were traded on Wednesday. At the end of the day 59 stocks closed higher, 253 declined while 23 remained unchanged. The value of shares traded during the day was Rs4.2 billion.

Hub Power Company was the volume leader with 12.8 million shares losing Rs3.17 to finish at Rs60.65. It was followed by Bank of Punjab with 7.7 million shares losing Rs0.46 to close at Rs10.31 and Telecard Limited with 7.5 million shares losing Rs0.6 to close at Rs5.19.

Foreign institutional investors were net sellers of Rs9.3 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, October 10^th, 2013.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.