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February 28, 2020

Stocks end down in a rollercoaster trade

Business

February 28, 2020

Stocks plunged and later recouped early losses in a highly volatile trade on Thursday as coronavirus cases in the country jittered investors and the benchmark index witnessed a big intraday decline of over 1,400 points, dealers said.

Panic selling was observed by investors on news that two individuals have been tested positive for coronavirus and the index declined to make an intraday low of 3.85 percent,” brokerage Topline Securities said in a post market note.

However during the last hours of trade recovery was witnessed, as the value investors came in to accumulate at attractive levels. “Recovery can be attributed to investor`s realisation that market has factored in impact of coronavirus to a large extend, as the index has declined by 5.4 percent alone during this week,” brokerage said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index closed 0.65 percent or 251.01 points down to 38,087.32 points, while KSE-30 shares slipped 0.39 percent or 68.41 points to end at 17,579.21 points level.

Sateesh Balani, director research at Ismail Iqbal Securities said the market witnessed significant volatility after more than one coronavirus cases were confirmed in Pakistan.

Furthermore, financial results of different companies were also below expectations which further created uncertainty, Balani said. The benchmark index traded in a wide range of 36,918 to 38,338 points with increased trading activity, while volumes were 58 percent higher compared to Wednesday.

Out of total 361 active scrips, 103 ended higher, 244 lower, and 14 were unchanged. Volumes reached 249.243 million shares, as compared to 147.943 million in the previous session. Samiullah Tariq, director research at Arif Habib Limited, said fear and panic on after the emergence of coronavirus patient in the city created tremors at the stock market.

However, with the closing numbers appeared it showed that the market overreacted to the situation. Dealers said the market saw one of the most volatile days for Pakistan stocks, as the KSE-100 recovered almost 80 percent of the day's losses.

Later, the undue panic related to coronavirus subsided and was followed by some short-covering and value-buying by investors. Dealers said following the onslaught, the market entered the oversold zone which paved way for some new buying as scrips became attractive.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities said the market reacted negatively owing to rollover week, which triggered adjustments in the key scrips. “Moreover, continuous decline in the crude oil prices, which have been trading around $48/barrel, impacted the local companies listed in the oil and exploration stocks. With heavy weightage in the benchmark index any decline in these companies trims overall the market values.”

Sapphire Fibre, up Rs44.89 to close at Rs889.88/share, and ICI Pakistan up Rs31.65 to finish at Rs712.51/share, were the top gainers of the day, while Nestle Pakistan, down Rs245.45 to close at Rs7,554.55/share, and Unilever Foods, down Rs100 to close at Rs7,200/share were the major losers.

Unity Foods Limited was the volume leader with 29.428 million shares, but lost Rs0.5 to end at Rs12.95/share, Fauji Cement, with 5.352 million shares, was the lowest-volume-maker, and shed Rs0.48 to end at Rs14.70/share.