Stocks fall over 2pc as UK exit frightens investors

KARACHI: Pakistani shares fell more than two percent on Friday, joining the global market rout after Britain voted to leave the European Union, dealers said. It was the biggest percentage loss in more than five months, they added.

“Great Britain voted to leave European Union which resulted in a sharp decline in the global markets along with local index which closed over two percent down after falling to the intraday low of 36,825 level,” Analyst Hammad Aman at the Topline Securities said.

The Pakistan Stock Exchange’s (PSX) benchmark 100-share Index closed lower 848.01 points, or 2.22 percent, to 37,389.88 points. The highest index of the day remained at 38,237.89 points, while the lowest level of the day was recorded at 36,825.19 points.

KSE 30-share Index also decreased 588.40 points, or 2.68 percent, to 21,347.16 points.

Turnover, however, surged 109 percent with an increase of 123 million shares to 236.83 million shares. Trading value also increased to Rs15.29 billion as against Rs6.60 billion and market capital fell to Rs7.47 trillion from Rs7.62 trillion. Of a total of 341 companies, only 44 recorded gains, 276 posted losses while 21 remained neutral.

International oil prices came off as a result of global uncertainty and concerns over a recession in UK with a knock-off effect in EU. Oil prices fell four percent with US crude trading at $47. This led to weakness in local oil exploration and production companies. Resultantly, local oil stocks, like OGDC, PPL and POL hit their lower limits, but closed down between 3.9 percent and 4.3 percent.

Yen appreciated as a result of Brexit, which had an impact on auto stocks to decline. HCAR, PSMC and INDU declined between 2.5 percent and five percent. Textile sector was also affected as Pound Sterling declined due to Brexit, which resulted in NML to close at its lower limit, Aman said.

Analyst Ahsan Mehanti at Arif Habib Corp said the market reacted to Brexit and plunged the record intraday lows of 1,412.7 points, but later recovered by 564.69 points amid support from fertiliser, cement and banking sectors.

Highest increase was recorded in shares of Nestle Pak XD by Rs50 to Rs7,350/share followed by Colgate Palmolive that rose Rs40 to Rs1,540/share. Major decrease was noted in shares of Rafhan Maize by Rs430 to Rs8,170/share followed by Bata (Pak) that fell Rs50.05 to Rs3,650/share.

Significant turnover was recorded in stocks of K-Electric Ltd, WorldCall Telecom, Dewan Cement, Engro Fertilizers, TRG Pak Ltd, Fauji Cement, Pak Elektron, Pak Int. Bulk, Dewan Motors and Bank of Punjab. 

K-Electric Ltd remained the volume leader with 24.13 million shares with a drop of 14 paisas to Rs7.76/share. It was followed by WorldCall Telecom with 15.23 million shares with an increase of 37 paisas to Rs1.96/share.

Shares’ turnover in the future contracts increased to 116.20 million shares from 98.37 million shares traded in the previous session.