close
Advertisement
Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!
March 26, 2020

Stocks continue slide on industrial lockdown in Sindh

Business

March 26, 2020

Stocks continued to witness decline, losing almost 5 percent on Wednesday, as investors fear industrial lockdown would lead to a further slump in the economy despite rate cut and government’s announcement of a relief package for businesses, dealers said.

During the last two consecutive sessions, benchmark KSE-100 declined 11.3 percent or 3,459 points which is the highest two-day decline in history. However, it is the highest two-day decline in percentage terms since October 12, 1998 (-11.4 percent).

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Panic selling continued at PSX as investors weighed economic impact of industrial lockdown and likely slump in exports pressuring rupee parity.”

Midsession support was witnessed in selected fertilisers scrips on reports of surging off-take and oil sector scrips on surge in global crude oil prices. Investor concerns over foreign outflows and economic instability amid virus outbreak played a catalytic role in the selloff at PSX, Mehanti added.

Pakistan Stock Exchange (PSX) KSE-100 shares index lost 4.68 percent or 1,336.03 points to close at 27,228.80 points level. KSE-30 shares index followed suit with a low of 5.53 percent or 693.08 points to end at 11,833.83 points level.

Of 298 active scrips, 79 moved up, 205 retreated, and 14 remained unchanged. The ready market volumes stood at 145.106 million shares, as compared with the turnover of 99.788 million shares in the previous session. Samiullah Tariq, director research at Arif Habib said the central bank’s announcement of cutting the interest rate failed to jack up market sentiment because of the lockdown in the province owing to the coronavirus outbreak.

“Due to the coronavirus, we are hearing that a number of brokers have been facing financial difficulties owing to continuous slide in the market.”

Moreover, a number of companies, including auto and motorcycle makers, cement manufacturers and others have decided to close down their operations to halt the spread of the virus, Samiullah said.

Salman Ahmad, head of institutional sales at Aba Ali Habib said, “The market felt tremors because of the settlement of the future contracts or rollover week where investors dumped their shares to settle the issue.”

It was now evident that the coronavirus outbreak was the main cause of concern for every investor across the globe, and the domestic market could not remain unscathed. “Economic cycle has been hurt badly,” he added.

Faizan Munsehy, head of foreign institutional sales at Next Capital said, “The rate cut has failed to buoy market and excite investors.”

The State Bank of Pakistan made a dramatic gesture on Tuesday evening by cutting the interest rate by 150bps to rein in the negative impact of coronavirus on the economy.

“An interest rate cut is normally a cause of celebration for the stock market”, however this time the measure failed to quell fears amongst investors, and the market moved sideways since the start of the trade on Wednesday, Faizan said.

The top gainers were Murree Brewery, up Rs34.49 to close at Rs602.67/share, and Shezan International, up Rs15.25 to finish at Rs289.25/share.

Pakistan Tobacco, down Rs137.90 to close at Rs1,701.00/share, and Rafhan Maize, down Rs100.00 to close at Rs6,500.00/share, were the main losers.

Maple Leaf recorded the highest volumes with a turnover of 14.454 million shares. Its scrip lost Rs1.39 to end at Rs17.31/share. The lowest volumes were witnessed in Oil and Gas Development Company, which recorded a turnover of 4.022 million shares, whereas its scrip lost Rs3.92 to end at Rs81.33/share.