Stock market continue downward trend, 100 index lose 285 points

KARACHI: The Pakistan Stock Exchange (PSX) continued its down trajectory of Tuesday, just a day after a free fall which saw the market collapse by over 1105 points.

The benchmark KSE 100 index declined by 285.28 points, or a decrease of 0.73 percent, and closed at 38,858.45 points. The indices even dropped lower than the 39,000 level before trading was suspended. The total volume of shares was 94.475 million valued at Rs5.183 billion.

The lower bench KSE 30 index also decreased by 173.18 points (0.96 percent) and close at 17,878.38 points. The total volume of scripts was 56 million. The share prices of several top active stocks saw a small rise notably Unity (2.11%), BOP (0.40%), Hascol (0.52%), MLCF (2.10%), DGKC (1.24%) and Fauji Foods (1.45%). The share prices of K-Electric (-0.77%), TRG (-1.28%), WTL (-2.25%) and OGDC (-1.93%) saw a decline.

The stock market has plunged over the disappointing decision by the Financial Action Task Force (FATF) which placed Pakistan on the grey list till June 2020. There were concerns that the coronavirus – which originates in China – has reached near Pakistan as the borders with Iran have been sealed temporarily. There has been a spike in cases of the deadly disease in the neighbouring country which had a toll on the stock market.

Global stocks are also reeling from the economic effects of the novel coronavirus. Stock markets across Asia, including Japan, Singapore, Korea, Thailand, Jakarta and India, also saw a sharp plunge. This also had a profound effect on the stock market in Pakistan. This is the second time in the year that indices have dropped below the 40,000 level as the stock remains in the same position as November 2019.

The market could rebound as economic indicators are showing signs of improvement. Inflation has reached a peak and could see a downward trend from March onwards. This recovery could be jeopardised by the global trend which would affect the home stock market as well.

On Monday, investors dumped stocks and ran to seek shelter in safe havens as gold hit its all-time high price in local and international market and reached an all-time high of Rs. 96,300 per tola. The next day gold prices decreased by Rs 2,200 in the local market.