KARACHI
Stocks nosedived after militants stormed military school in Peshawar killing over 125 children.
Bearish activity witnessed in stocks across the board amid higher trades during the rescue operations of the national tragedy. Concerns for major fall in Asian stocks after WTI Crude prices broke below $54, pending receivable in energy sector and 48 hour deadline set by PTI demanding judicial commission for election audit played a catalyst role in record fall at KSE on Tuesday, market analysts said. The benchmark KSE-100 Index plunged by 813.83 points level or -2.57 percent and settled at 30876.28 points as compared to 31690.10 points previous day.
Karachi market fell sharply after fall in global equity and commodities market. Attack on a school in Peshawar also dampened the sentiments. Index heavy weight oil stocks plunged the most as OGDC, PPL, POL closed at 5pc lower limit amid continuous fall in international oil prices, said Samar Iqbal. The All-Shares index dropped by 563.52 points or -2.45 percent and closed end of the day at 22409.25 points, KSE-30 Index declined by 590.34 points or -2.87 percent and concluded at 19972.84 points while KMI- 30 Index fell by 1675.17 points or -3.28 percent and closed at 49344.10 points.
Higher and Low were 31716.79 and 30808.33 respectively.
Volumes rose to 262m shares, value also increased to $152m (value PKR15.2b) The total traded volume in the market was 296,006,674 and in term of exchange it was 18,105,756,983. Total traded companies were 383 of which 52 were in advance, 313 in decline and 18 were unchanged. Analyst at Topline brokerage house said, Pakistan equity market fell 2.6pc today. This was the steepest fall after 4 months. In absolute terms, 813 points fall was not seen since Aug 2014 when market fell 1,309 points.
Main reason, they think, for this is global stock market rout. While weak oil prices have led to uncertainty over global economic growth, more than 5pc drop in China’s benchmark Shanghai Composite Index last week has triggered mega sell-off in global stock markets. MSCI Emerging Markets (EM) Index is down 6pc while MSCI Frontier Markets (FM) Index is down 7pc since the start of Dec 2014. Foreign Investors Portfolio Investments (FIPI) net selling of $32m in last 7 trading sessions (Dec 5-15, 2014) clearly signals that Pakistan market is following global market trend where all countries whether they are net exporter or net importer of oil are being affected.
So far in 2014, foreigners have bought shares worth $2.3b and sold $1.9b, resulting in net buying of $399m. Inclusive of UBL offering, net foreign buying in 2014 to date stands at $710m. Liquidity crunch in local market is also one of the reasons for the recent fall in KSE-100 Index. Three IPOs worth Rs15b and with subscriptions of Rs23b in last 2 weeks have resulted in funds being stuck up with these offering.
Moreover, it is normal that financial institutions do not lend aggressively against shares before Dec closing which is also affecting the local liquidity. As a result of this Margin Trading System (MTS) rate in the share financing market has reached upper limit of 18pc, showing investors finding it difficult to leveraging their positions.
Going forward, analyst believe that foreign flows, interest rates and local political situation will be the key drivers of Pakistan market.