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August 17, 2019

Kashmir tensions knock stocks 2.26 percent down

Business

August 17, 2019

Stock fell sharply on Friday as escalating geopolitical tensions between Pakistan and India heightened investor fears, dealers said.

Analyst Madiha Javed at Ismail Iqbal Securities said the benchmark index remained under pressure throughout the session after “India hinted it may be reconsidering its doctrine on nuclear weapons”.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index plunged 2.26 percent or 664.44 points to close at 28,764.63 points level. KSE-30 shares index followed suit with a low of 2.80 percent or 386.39 points to end at 13,406.78 points level.

Of 310 active scrips, 81 moved up, 212 retreated, and 17 remained unchanged. The ready market volumes stood at 65.212 million shares, as compared with the turnover of 76.410 million shares in the previous session.

Dealers said trading volume was down 14 percent from last Friday as trading resumed at five days of Eid holidays. E&Ps, fertiliser and commercial banks were the major draggers of the index, cumulatively shedding 413 points.

Analyst Ahsan Mehanti from Arif Habib Corporations said panic gripped investor sentiments at the market on uncertainty over outcome of Kashmir move revoking IHK special status. “US decision to reduce Pakistan aid by $440 million under Kerry Lugar Berman Act to $4.1 billion, concerns over Quetta blast, government decision on suspension of trade ties with India, and weak global crude oil prices played a catalytic role in the bearish close,” Mehanti added.

Salman Ahmad, head of institutional sales at Aba Ali Habib said the market would move accordingly next week if something positive happened over the weekend. Oil and gas sector recorded hefty declines, which led to overall decline in the market. Institutional selling also made dents as redemption calls increased, Ahmad added.

An analyst said foremost for the bourse was reduction in tension between Pakistan and India, which was trimming share values. Other factors were poor economic numbers, low foreign direct investment, soaring inflation, high interest rate that discouraged private sector investors, and fear of looming global recession.

At the flag hoisting ceremony, State Bank of Pakistan Governor Raza Baqar said the economy was on the right track, but traders were of the opinion that they require results on the ground because sales of the companies were slowing down, hitting the profitability of the companies.

The highest gainers were Sanofi-Aventis, up Rs19.03 to close at Rs455.59/share, and Pakistan Gum & Chemicals, up Rs7.77 to finish at Rs163.17/share.

Companies that booked highest losses were Sapphire Textile, down Rs65.75 to close at Rs1,249.28/share, and Indus Motor Company, down Rs37.90 to close at Rs962.10/share.

Pakistan Petroleum recorded the highest volumes with a turnover of 6.332 million shares, whereas the scrip lost Rs5.15 to end at Rs108.25/share. The lowest volumes were witnessed in Hub Power Company, recording a turnover of 1.789 million shares, while the scrip lost Rs2.06 to end at Rs60.70/share.

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