Stocks lose 786 points amid rising political heat

KARACHI: Stock market took the investors on a roller-coaster ride on Monday. The hope of a major rally was dashed to dust in the latter hours as the KSE-100 index tumbled to close with heavy losses of 786 points, or 1.72 per cent, at 45,051.

Investors were excited over the expression of confidence in Prime Minister Imran Khan by the National Assembly last Saturday. The retention of Dr Hafeez Sheikh as the head of finance and the major jump in international oil prices over the weekend, signaled that the market might head firmly to the north.

The market opened gap up and rose to intraday high by 595 points in early trade.

But the investors’ exuberance died down and the index spiralled down to intraday low by 988 points, as the realisation dawned that the uncertainty on the political front was far from over with the opposition mobilising forces to install their candidate on the seat of chairman Senate as well as to dislodge the Punjab chief minister.

Other than that investors were spooked by the recent rapid surge in inflation and the upcoming monetary policy. Traders said that the investors’ lost appetite for equities also due to rise in government bonds yield, along with an increase in profit rate on National Saving Schemes.

Foreign investors —mainly overseas Pakistanis- bought shares worth $2.84m and individuals were the savour of the market as they took fresh positions in stocks worth a tidy sum of $13.38m. Mutual funds which liquidated stock of $9.37m were followed by profit-taking by companies, banks, broker proprietary trading and insurance companies.

Sectors contributing to pushing the index downhill included cement (205 points), banks (104 points), power (67 points), autos (49 points) and pharma (46 points).

The trading volume increased 45pc to 459.8m shares from 317.2m shares the previous day. Stocks that contributed significantly to the turnover included ANL, Unity Foods, TRG, PRL and Byco Petroleum.