"We relate huge selling by foreigners and sharp decline in Index to global sentiments in equity markets as concerns on global outbreak of COVID-19 (Corona Virus Disease 2019) intensified in February 2020," a research report of Sherman Securities said.
This has created a panic like situation in equity markets across the globe as investors' fear of a slowdown in global demand during rest of 2020, the report said. However, despite the fact that Pakistan is largely insulated from the economic impact of COVID-19, the KSE-100 Index stood out as the third worst performing Asian emerging market (as defined by MSCI) in February 2020, it added.
Indonesia remained worst performing market amongst 9 MSCI Asian emerging countries followed by Thailand. Similarly MSCI world posted negative return of 7.0 percent in February. Amongst major sectors, oil stocks remained worst performers amid sharp decline of 11 percent crude oil prices during February.
Out of $50.2 million net selling in February (excluding February 28 figures), foreigners remained net sellers in oil stocks ($14.4 million) which resulted in huge underperformance of the sector. Moreover, net selling of $14.9 million and $12.7 million recorded in Cement and Banks (on net basis), respectively.