Meltdown on PSX: index plunges 936 points

KARACHI: From profit-taking a day earlier, the stock market descended into panic selling on Thursday as the KSE-100 index lost a massive 936 points (2.46 per cent) and closed at 37,101.

The market opened on a negative note and the index sank to intraday low of 1,004 points. Given the decline of 527 points a day earlier, investors feared more downside, sending them into selling spree across the board.

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Traders said that the market came under pressure as Wednesday’s T-bill auction (three months and one year) as they saw yields come up to match State Bank of Pakistan key rate. Together with the expected rise in November inflation due to food prices, it fortified the belief that SBP might adopt a status quo stance in Friday’s monetary policy committee meeting.

Arif Habib Ltd stated in its report that the “News of implementation of Axle Load policy as directed by Islamabad High Court broke the day, post market opening, which had a knee-jerk reaction on cement and steel stocks.”

Selling pressure kept building up with investors concerned about growing political wrangling. It was difficult to see through the haze as PTI government met with strong criticism on allowing the former prime minister Nawaz Sharif to go abroad, while the judiciary also passed buck back to the government regarding permission to ex-PM to proceed overseas for treatment.

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Foreigners, individuals and institutions were net buyers but mutual funds sold-off equity worth $5.12 million. Banking was the major laggard, while exploration and production, fertilisers and cements also saw heavy profit-taking.

Scrip-wise downside was attributable mainly to Engro Corporation, decreasing by 2.52pc, Lucky Cement 4.62pc, Fauji Fertiliser 2.10pc, Dawood Hercules 2.36pc, DG Khan Cement 5pc, Engro Fertiliser 1.73pc, Pakistan State Oil 5pc, Pakistan Petroleum 2.37pc, Pakistan Oilfields 2.42pc, Oil and Gas Development 1.28pc, Habib Bank 1.79pc, Bank Al Habib 2.62pc, Meezan 5pc, MCB 1.39pc, National 4.99pc, Alfalah 1.92pc and United 0.74pc.