The Karachi share market witnessed panic-selling on Thursday due to downgrading foreign debt rating on four Pakistani banks and investors'' concern over imposition of capital gain tax, sagging rupee value and the news on the expected increase in discount rate by the State Bank of Pakistan (SBP).
The benchmark KSE-100 index witnessed heavy loss of 347.49 points to close at 13,627.00 points level while the KSE-30 index declined by 500.55 points and settled at 16,083.03 points level.
The market started slightly positive and the KSE-100 index once again briefly crossed 14,000 psychological level to hit 14,018.82 points intra-day high level. However, heavy selling pressure due to investors'' concern over downgrading foreign debt rating on four Pakistani banks, falling rupee value and imposition of capital gain tax created negative sentiment.
The news that SBP is raising discount rate created panic-selling and the index dropped into negative zone. The index reached 13,566.17 points intra-day low level, down by 408.32 points. Late buying mainly in OGDC supported the index to minimise its intra-day losses and reach at the closing level.
Ready market volume increased to 191.475 million shares as compared to 175.765 million shares traded a day earlier. The futures market turnover, however, slightly declined to 53.471 million shares against 54.571 million shares traded on last Wednesday.
The overall market capitalisation declined by Rs 104 billion to Rs 4.191 trillion. Trading took place in 356 scrips, out of which 273 scrips closed in negative and only 63 scrips closed in positive while the value of 20 scrips remained unchanged.
The E&P giant, OGDC, was the star performer of the day with 14.127 million shares and surged by Rs 0.75 to close at Rs 133.00. PPL and POL, however, declined by Rs 3.50 and Rs 3.20 to close at Rs 267.00 and Rs 414.30 respectively. Pak Reinsurance lost Rs 5.55 to close at Rs 105.48. DG Khan Cement decreased by Rs 3.75 to close at Rs 84.50. Arif Habib Sec declined by Rs 6.01 to close at Rs 178.99.
Heavy selling pressure was witnessed in banking sector stocks and many of the banking sector stocks closed at their lower locks. NBP, NIB Bank and Bank Alfalah lost Rs 10.09, Rs 0.86 and Rs 2.69 to close at Rs 191.81, Rs 14.44 and Rs 51.11, respectively. Engro Chemical declined by Rs 6.95 to close at Rs 304.00.
Colgate Palmolive and Sapphire Fiber were the highest gainers and gained Rs 14.00 and Rs 12.25 to close at Rs 599.00 and Rs 257.35 respectively while Unilever and Attock Petroleum were the highest losers and lost Rs 29.99 and Rs 26.00 to close at Rs 2,350.00 and Rs 506.00, respectively.
Ahsan Mehanti at Shehzad Chamdia Securities said that heavy selling pressure was witnessed at the share market as banks disallowed to claim tax allowance on provisions against outstanding loans. The Moody''s downgraded foreign debt ratings on four Pakistani banks, which deepened investors concern and triggered panic-selling at the share market mainly in banking sector stocks. On the other hand, investors'' concern over the imposition of capital gain tax and sagging rupee value also created negativity and the investors opted to offload their holdings.