Bloodbath continued Monday at the volatile Pakistan Stock Exchange (PSX) where the KSE-100 index tumbled to nine-month low to 30,628 points. The benchmark index lost almost 1,200 points during the first half of the week's first session due to what analysts said margin calls. It, however, recovered later to arrest its loss at 1.2 percent or 373 points. "Panic ensued in the local market as it fell for 11th consecutive session today for the first time since the financial crisis of 2008," said analysts at Topline Research.
Last 11 sessions saw local equities declining eight percent. "Interestingly, according to our analysis, Pakistan market has fallen 11 times by 10 percent plus. And except for infamous market crash of 2009, on an average it has recovered losses in 5 weeks," said analysts.
Ahsan Mehanti of Arif Habib Corp said the bourse plunged to nine-month low on "geopolitical uncertainty" and slump in WTI crude oil prices below $29 a barrel. "Bearish global equities, surging circular debt in the energy sector, weak data on fertilisers sales and exports played a catalytic role for the bearish close in the earnings announcement session at PSX," the analyst said. Trading turnover rose to 210 million shares valued up at Rs 10.54 billion. The number of scrips declined outnumbered the advanced ones by 227 to 98.
Market cap having contracted to Rs 6.49 trillion, the foreign investment made a net selling of portfolios worth $7.97 million. K-Electric led volumes with 15.8 million shares. The power utility appreciated to Rs 7.06 from the previous Rs 6.85 at close. Other best performing stocks were TRG Pakistan, DG Khan Cement, Bank of Punjab, Pace Pakistan, SNGPL, JSCL, Byco Petroleum, SSGC and PIBT. Futures trade slid to 25.24 million contracts. "Investors overplayed the news of lifting of sanctions from Iran and the resultant influx of Iranian cement in the local market," said Topline analysts.
This made DG Khan Cement and Maple Leaf Cement shedding 2.6 and 0.6 percent. Lucky Cement also fell and hit intraday low of 5 percent. The cement manufacturer, however, rebounded by the session close to 0.3 percent. "We think Iran cement is not a big risk as imported cement with duties and transportation may not have a significant effect," they said. Lifting of sanctions from Iran also impacted global oil prices on fears of increase in supply from Iran by 500,000 barrels per day, analysts said. Resultantly, Pakistan Petroleum, Oil and Gas Development Company and Pakistan Oilfields lost 2.4 to 4.5 percent.
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