Stocks tumble

Pakistan Stock Exchange witnessed the worst-ever single day decline on the first day of its re-entry in the MSCI-EM Index Thursday. The benchmark KSE-100 index fell by 1,810.76 points to settle at 48,780.81 points. Foreign investors remained net sellers selling equities worth $16.5 million.
In the course of trading, the index dropped to 48,359.90 points, down 2,231.67 points, however it recovered slightly as some investors opted to buy select stocks on dips at the fag end. The index has lost 3,856 points during last four trading sessions while the market capitalization has also declined by Rs 653 billion.
Trading activity remained low as daily trading volumes on the ready counter declined to 403.935 million shares as compared to 410.816 million shares traded Wednesday. The market capitalization decreased by Rs 326 billion to Rs 9.757 trillion. Out of total 394 active scrips, 352 closed in negative, only 35 in positive while the value of 7 stocks remained unchanged.
K-Electric was the volume leader with 49.818 million shares. However, it lost Rs 0.38 to close at Rs 6.94 followed by Bank of Punjab (R) that closed at Rs 1.15, down Rs 0.21 with 27.603 million shares. Power Cement (R) decreased by Rs 0.35 to close at Rs 2.05 with 23.717 million shares. Shezan International and Wah Noble were the top gainers with Rs 9.96 and Rs 8.55, respectively to close at Rs 440.06 and Rs 306.20. Rafhan Maize and Wyeth Pak were the top losers with Rs 108.33 and Rs 95.07, respectively to close at Rs 7,191.67 and Rs 2,213.77.
Leading analyst Muhammad Sohail, CEO of Topline Securities said the index went down by 4.4 percent, steepest fall since August 11, 2014 when the market fell by 4.5 percent. However, it was worst-ever single day point decline. Last time, the market declined by 1,419 (4.1 percent) points on August 24, 2015 on account of China's surprise decision to devalue yuan. Thursday marked the first day of Pakistan's re-entry to the Emerging Market stage, who would have thought it would bring about the single largest points decline (down 1,811 points) in the history of the bourse. Relentless selling spilled over from Wednesday, with participants opening the flood gates in wake of net FIPI outflow of $82 million on Wednesday against expectation of net inflows. The top 10 index point losers were HBL (down 4.0 percent), UBL (down 4.8 percent), OGDC (down 4.7 percent), LUCK (down 4.7 percent), HUBC (down 4.1 percent), ENGRO (down 3.8 percent), MCB (down 4.2 percent), PPL (down 4.2 percent), DGKC (down 4.6 percent) and PSO (down 4.4 percent), taking away 876 points from the index. The inclusion day turned out to be completely contrary to expectations in terms of foreign flows and market performance, its safe to assume that all participants sold heavily as the market clocked a low of down 4.6 percent or 2,230 points.
An analyst at JS Global Capital said that the bloodbath activity was witnessed in the market as the index lost around 1,811 points to close at 48,781 level. This pressure in the market was on the back of MSCI EM rebalancing and likely redemptions in mutual funds. Banking sector led the decline as the sector lost to close (down 3.84 percent) lower than previous trading session. MCB (down 4.22 percent), UBL (down 4.78 percent) and HBL (down 4.00 percent) in this sector lost value to weigh down on the index. On the other hand CPI numbers clocked in at 5.02 percent for the month of May 2017. Selling pressure was witnessed in the E&P sector where POL (down 3.49 percent), PPL (down 4.21 percent) and OGDC (down 4.69 percent) lost value to close in red. Cement sector continued its previous trend as the sector lost value to close (down 3.31 percent) lower than its previous day. Furthermore, heavyweights such as LUCK (down 4.67 percent), DGKC (down 4.63 percent) and CHCC (down 2.73 percent) also closed in the red zone.