Dubai/islamabad           -             The Dubai bourse hit a 14-month low with all its blue-chip stocks witnessing sell-off on Sunday. The UAE and other Gulf stock markets lost massively on Sunday, the first trading day of the week, due to increased worry about the growing number of coronavirus patients in the region and worldwide.

The Dubai Financial Market and Abu Dhabi Securities Exchange plunged 4.7 per cent and 3.6 per cent, respectively, by mid-day on Sunday. The Dubai bourse hit a 14-month low with all its blue-chip stocks witnessing sell-off on Sunday. Barring Al Salam Sudan, all the shares on the Dubai fell. The Abu Dhabi index’s 3.6 per cent is its biggest intraday fall since January 2016. First Abu Dhabi Bank declined 4.3 per cent, while Abu Dhabi Commercial Bank dived 8 per cent.

Only three stocks on the Abu Dhabi bourse were up by mid-day trading while all the remaining listed companies were down. The central bank of the UAE on Saturday advised banks to reschedule loans and reduce fees and commissions as part of measures to mitigate the economic effects of the coronavirus outbreak.

The country has reported 21 people infected with the coronavirus, five of whom have recovered. The GCC countries are putting restriction on the local events as well as restricting the movement of the people across the border in order to control coronavirus. Kuwait’s bourse, which traded after a three session break, plunged 11 per cent, its biggest ever intraday fall, led by a 14.5 per cent drop in National Bank of Kuwait and a 10 per cent slide in Kuwait Finance House.

The exchange said it had suspended trading for rest of the day due to the steep decline. Whereas, the global coronavirus outbreak hit the capital market badly as it witnessed the worst week in more than two and a half years and slumped by 5.6%, dealers said, expecting the situation to persist.

“The coronavirus continued to keep a firm grip on local headlines, as the number of reported cases increased in Italy and neighbouring Iran, while a couple of cases were also identified in Pakistan,” Ahmed Lakhani, a JS Global analyst said.

Given the outbreak of the virus hitting more than four dozen countries with no signs of containment in sight, global equities and commodities (such as oil) were quick to witness a rout.

The panicky scenario was naturally not exclusive to Pakistan, with most major regional and global markets receding during the week. “Not in one session did the market close in the green zone, remaining firmly etched in red,” he said, according to the publication.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index tanked by 5.6% or 2,266 points to close at 37,984 points, depicting the biggest weekly decline since June 2017 on point-basis. Average volumes settled at 174 million shares, up by 63% while average value traded clocked-in at $48 million, up by 54% on week-on-week basis. Foreign selling continued this week clocking-in at $22.5 million compared to a net sell of $8.6 million last week. Selling was witnessed in commercial banks amounting to $7.6 million and E&P $4.8 million.

On the domestic front, major buying was reported by insurance companies at $25.3 million and banks/DFIs at $7.8 million. An analyst from Habib Metro-Financial Services told The News that they expect the weakness in the index to continue, primarily due to fears surrounding the spread of coronavirus, which was being overplayed.

“Bargain hunting in index blue-chips is our advised strategy, while we highlight the upcoming inflation data as a key trigger event (as CPI is expected to see a sizeable drop due to prices of food items returning to normalised levels),” he said.

The results season advanced ahead with big names announcing earnings that failed in exciting the un-nerved mood at the market. Exploration and production giants, Oil and Gas Development Company (OGDCL) and Pakistan Petroleum Limited (PPL) both reported lower than expected earnings due to a large uptick in exploration costs and also due to substantial slide in crude oil prices.

“With the extension of global panic over coronavirus and its spillover on markets, currencies and commodities alike, we expect pressure on the benchmark KSE-100 index to sustain,” an analyst from Arif Habib said.

“Albeit, topsy-turvy trend of the market on last day of the week suggests that recent correction has opened up valuations and select sectors may come under limelight.”