KARACHI: Stocks fell to its weakest close since September 2014 on Tuesday, as panicked investors sank shares in a sea of red after provincial governments imposed lockdowns to fight coronavirus in the country, dealers said.
Free fall in the market was observed in the first trading session following the lock down announcement by the provincial governments over the long weekend,” brokerage Topline Securities said in a post market note.
“The market saw its seventh halt and the market activity remained suspended for two hours in very thing participations.”
Pakistan Stock Exchange (PSX) benchmark KSE-100 index plunged 6.86 percent of 2,103 points to close at 28,565 points, the lowest level since September 1, 2014.
This has been the highest day-on-day decline in percentage terms since May 20, 2002 or 7.5 percent. KSE-30 shares index followed suit with a low of 7.46 percent or 1,010.12 points to end at 12,526.91 points level. Of 285 active scrips, 24 moved up, 253 retreated, and 8 remained unchanged. The ready market volumes stood at 98.788 million shares, as compared with the turnover of 244.998 million shares in the previous session.
Analyst Ahsan Mehanti from Arif Habib Corporations said stocks fell across the board on investor fears over global equity selloff, which continues on virus outbreak.
“Economic uncertainty amid Pakistan’s growth forecast at 2.5 percent in FY20 on impact of virus outbreak, rupee instability, and concerns over reports on cancellation of textile export orders played a catalytic role in the selloff at the PSX,” Mehanti added.
The stock market opened at 11.30 am on Tuesday, as the Securities and Exchange Commission of Pakistan had made changes in the regulations overnight. Trading was delayed, and for 15 days or till the lock down, new schedule has been announced limiting the trading session.
Moreover, instead of trading halt of 45 minutes, it was changed to 2 hours. The market after trading for only seven minutes lost nearly 7 percent which lead to a halt of two hours.
Ovais Ahsan, chief executive officer at Optimus Capital Managements, said the market reacted to the provincial governments’ decision to implement a lockdown to counter the spread of the coronavirus.
“Panic ruled as investors’ fear the looming uncertainty over the worsening situation on back of exponential growth in infections, while slowdown in economic activity due to the closure also created bearish sentiment,” Ahsan added.
Samiullah Tariq, director research at Arif Habib, said the market plunged within minutes of opening, as it was the first trading session after lockdown.
Market participants were now looking forward to the measures that would be announced by the prime minister to cool down the economic down turn, as incentives might help the index recover. “Investors anxiously need some financial package to arrest the continuous declining trend,” Tariq added.
Faizan Munshey, head of foreign institutional sales at Next Capital, said the stock markets suffered heavy losses as provinces went into lockdown to curb the spread of the coronavirus cases in the country.
“Over the weekend in Pakistan, the virus drove several companies to shut operations and the government sent provinces into lockdown, bringing normal life to a grinding halt,” he added.
The top gainers were Bata Pakistan, up Rs47.87 to close at Rs1,408.58/share, and Sapphire Textile, up Rs33.35 to finish at Rs809.99/share.
Colgate Palmolive, down Rs162.79 to close at Rs2,007.87/share, and Phillip Morris Pakistan, down Rs145.54 to close at Rs1,795.11/share, were the main losers.
K-Electric Limited recorded the highest volumes with a turnover of 25.596 million shares. Its scrip lost Re0.34 to end at Rs2.65/share.
The lowest volumes were witnessed in Pakistan International Bulk, recording a turnover of 2.105 million shares, whereas the scrip lost Re1 to end at Rs7.72/share.
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