Stock market plummets by 1105 points over FATF decision

KARACHI: After a lacklustre week during which the stock market remained largely flat due to muted investor activity, the stock market plummeted on the first day of trading on Monday.

The benchmark KSE 100 index had a freefall losing 1105.49 points, or a decrease of 2.82 percent and close at 39,143.73. There was carnage at the stock market which closed well below the 40,000 points level which it struggled to regain last week. The total volume of shares was 103.982 million valued at Rs4.722 billion.

The lower bench KSE 30 index also witnessed a massive decline of 546.21 (-2.41 percent) and close at 18,051.56 points. The total volume of shares was 52,576 million. The share prices of the top active stock fell steeply and end up in the red. This includes Hascol (-6.43%), Unity (-7.01%), KEL (-3.93%), BOP (-4.52%), MLCF (-5.66%), DGKC (-4.92%), AVN (-5.50%), Lotte Chemical (3.83%), TRG (-6.46%), and WTL (-5.32%).

The market reacted strongly to reports that Pakistan has been retained on the grey list by the Financial Action Task Force (FATF) till June 2020. The global body during the plenary session which concluded on Friday expressed satisfaction over Pakistan’s progress over the action plan on money laundering and anti-terror financing regimes. However, it was not considered sufficient enough to be removed from the grey list.

Last week remained dull for the stock market as bears had the upper hand against bulls before trading was suspended on Friday. There was a minuscule increase of just six points over the previous week. Investors remained cautious and dumped stocks over profit-taking. The market was expecting a more positive outcome from the FATF’s meeting and remained disappointed over the decision.

The stock market stands at the same level as during late November 2019. All gains made since then have been reversed and investor confidence will be further reduced over lower profit expectation. The market was also affected by the growing coronavirus which has become a global phenomenon. Neighbouring Iran recorded at least five deaths forcing Pakistan to close the Taftan border to prevent the spread of the disease.