KARACHI: Stocks hit a two-week low on Wednesday, with the benchmark index shed almost one and half percent as investors panicked following reports of heightening tensions between rivals Pakistan and India over disputed Kashmir, dealers said.
Dealers said rising regional political tension as well as rumors for margin calls triggered across-the-board panic sell off that resulted in worst losses in three months.
“Concerns over domestic politics and more importantly on regional politics situation as Pakistan-India tensions mount after recent Kashmir attack, spooked investors and gave equities a good excuse to correct,” said analyst Faisal Bilwani at Elixir Securities.
After the morning bell, market slipped, followed by mid-day recovery. However, reports of foreign selling in index names and retail investor's struggle to offload small and mid caps stocks pulled benchmark index to close the day with worst losses in last twelve weeks.
The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index shed 1.41 percent or 569.04 points to close at 39,771.42 points.
The highest index of the day remained at 40,357.62 points, while the lowest level of the day was recorded at 39,647.65 points. KSE-30 Index also fell 1.29 percent or 290.20 points to close at 22,152.08 points.
Turnover dropped 23 percent or 210 million shares to 693.04 million shares, trading value decreased to Rs19.03 billion compared to Rs20.73 billion, while market capital fell to Rs8.04 trillion from Rs8.14 trillion. Out of 441 companies’ active in the session, 73 closed in green, 362 in red while six remained unchanged.
Ahmed Saeed Khan, analyst at JS Research, said the fertiliser sector remained under pressure as the government failed to announce the subsidy payment scheme on imported DAP.
“The oil sector also came under pressure despite global crude oil price rising as concerns grow that the OPEC will not clinch a deal to limit production in Algiers next week as members stay focused on either boosting output or defending their market share,” Khan said.
Analyst Ahsan Mehanti at Arif Habib Corp said stocks fell sharply on investor fears over foreign selling and dismal FDI data for Jul-Aug'16, while worsening Pak-India relations over baseless infiltration claims bids at the LoC played the key role in bearish momentum.
Highest increase was recorded in shares of Rafhan Maize XD, which rose by Rs99.95 to Rs7,599.95/share, followed by Pak Tobacco XD that increased by Rs35.16 to Rs1,110/share. Major decline was noted in shares of Nestle Pakistan XD, which fell by Rs75 to Rs7,425/share, followed by Service Industries Ltd XD that decreased by Rs60.60 to Rs1,274.13/share.
Significant turnover was recorded in stocks of WorldCall Telecom, Pace (Pak) Ltd, Bank of Punjab, Dewan Salman, TRG Pak Ltd, Azgard Nine, Media Times Ltd, Dewan Cement, Pakistan Telecommunication Company Limited and K-Electric Ltd.
WorldCall Telecom remained the volume leader with 63.45 million shares with a decline of 27 paisas to Rs2.35/share.
It was followed by Pace (Pak) Ltd with 55.23 million shares with a drop of 11 paisas to Rs10.01/share. Shares’ turnover in the future contracts fell to 51.80 million shares from 57.32 million shares traded in the previous session.