KARACHI -  Pakistan Stock Exchange (PSX) saw a bloodbath on Thursday and the benchmark KSE 100-index plunged by 1,123 points as panic gripped investors’ sentiments after US President recognised Jerusalem as capital of Israel, raising concerns for regional uncertainty.

Bears opened the floodgates yesterday where KSE 100-index fell below the 39,000-point level to close at 17-month low of 38,785 points. The KSE-100 index was 38,368 points on July 11, 2016, dealers said.

Investors showed interest at lower range of the prices. Major dampeners were commercial banks, fertilizer, oil & gas, E&P, cement and power sectors that contributed 772 points to the index decline, market participants said.

An amalgamation of local politics where opposition political parties are allegedly planning a sit-in against Model Town tragedy, geopolitics where US decision to make Jerusalem the capital of Israel has sparked outrage in the Muslim world, domestic individuals panicking over upcoming change in trading Circuit Breaker rules, along with overnight dip in crude oil prices have all culminated towards this sell-off, believes dealer at Topline Securities. “The KSE 100-index market cap in dollar terms is literally back to 2008 levels, when the index was circa 15k points and our market cap peaked at $75.3b (KSE-100 was 15,472 points on Apr 4, 2008) before the 2008 crash. Today the index is 38.8k while our market cap in dollar terms is $78.2m,” he added.

According to AHL Market Data, finally the signs of major attrition hit the market and took many by surprise. As a long term trend of PE mean reversion in process, the market still seems to grapple with low investor demand who seems to anticipate the onslaught from macro-economic imbalances but not quite sure when and whether this will happen. On the political front, uncertainty still prevails with another episode of sit-ins and protests being threatened by the political party affected by Model Town incident. Investors seem to have taken backseat in view of the developing situation.

Top 10 index point decliners were HBL (down 3.9%), UBL (4.8%), ENGRO (3.4%), OGDC (2.2%), PSO (5%), POL (3.2%), FFC (3.8%), HUBC (3.1%), MCB (2.3%) & LUCK (2.3%); withholding 523 points from the index, while 8 stocks closed in the green, adding just 18 points to the index.

Volumes increased 9% d/d while value traded soared 58%. Stocks leading the volumes included KEL, WTL, DCL, BOP and TRG, contributing 54m shares, reflecting 33% share of the total volumes.

 

 

 

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