KSE plunges 403 points

Selling pressure on the first session of the new week badly bruised the sentiment of the investors resulting in that all the key stocks closed on a lower circuit, shrinking the daily volume.
The slide of the market continued with the KSE-100 index plummeting by another 403 points or 4.1 percent to close at the 9404-point level. The market opened on a positive note and marked an intra-day 184 points high, thus touching the 9992 point level.
Subsequently, immense selling pressure plunged the index into the negative territory, resulting in it breaching the 9500 support. The KSE-100 index closed 587 points lower from its intra-day high. From Friday''s opening, the market has lost 766 points.
Supreme Court of Pakistan cancelled Pakistan Steel Mills (PSM) sell-off to a three party consortium comprising of Russian Magnitogorsk, Saudi Al Tuwariqi and Arif Habib Securities for $362 million on Friday evening.
After Friday''s battering in anticipation of a negative ruling by the apex court, the market opened on a positive note and initially the index did manage to make an intra-day high 9991 but it was not for too long when bears once again took full control.
The index suffered heavy losses, without any sort of resistance, which clearly signals that there is no confidence left in the market at least for the time being. Even the continuation of prohibition on short selling in future contracts was not able to help market sentiment.
Noor Hameed, research analyst from Elixir Securities said that the cancellation of PSM has indeed damaged the market sentiments as the investors'' fear the slowing down of the privatisation process of the state-owned assets like SNGP, SSGC, PSO, PPL & NIT.
However, statements from the Supreme Court and the government itself clearly state that this decision will and should not in any way cause any sort of interference/impediment in the privatisation process.
It seems like the earlier pullback of 1500 points from the 8766 was not good enough to hold a strong rally as volumes were extremely thin & there was hardly any participation from local institutions.
After today''s closure we are of the opinion that this time market will take its own course to settle down as it will take a lot to rebuild confidence.
Corporate results will start pouring in from the start of August and only that will decide the fate of the market as for the time being the market is completely trapped.
For the leveraged players we have been repeatedly saying that they should completely runaway as this market has nothing to offer. Our concerns remain the same, volatility should slow down and volumes should pick up.