Course Correction? Index Loses Over 2,000 Points In Single Day

Banks, energy and power, fertilizer, technology and oil marketing companies led the dive at the bourse

Course Correction? Index Loses Over 2,000 Points In Single Day

The Pakistan Stock Exchange on Tuesday saw bears cause a bloodbath as the index crashed by over 2,000 points in a single day of trading.

The index opened on Tuesday at yesterday's closing level of 65,204.67 points. The bourse continued to slide from the opening bell, losing over 1,000 points in the first session. 

At one point during intraday trading, the KSE-100 index fell to a low of 62,361 points, down cumulatively by 2,844 points or around 4.36%. As it did so, it smashed past every major psychological barrier including at 65,000, 64,000 and 63,000.

But before the end of the day, the benchmark index made a slight recovery to close at the 62,833 level (down 2,372 points; 3.64%) as some sought bargain buys. 

Securities firm Topline attributed the current chilly spell at the bourse to institutional profit-taking as the calendar year draws to a close. Other factors affecting the bourse include muted activity from foreigners who have shown only a moderate year-on-year increase in foreign direct investment, with $131 million poured in. Further, this period also sees the commencement of the annual holiday season abroad.

Topline further noted that the market has experienced some aggressive trimming. Some experts have suggested that the market was due a correction sooner rather than later. Another reason for the trimming is that the final week of the calendar year is considered a rollover week for future's contracts.

On Tuesday, banks, energy and power, fertilizer, technology and oil marketing companies were among the sectors which witnessed considerable selling.

Muslim Commercial Bank (MCB), Oil and Gas Development Company (OGDC), Dawood Hercules Corporation Limited (DAWH), Systems Limited (SYS) and Pakistan Petroleum Limited (PPL) together contributed negative 557 points to the index.

On the other hand, Pakistan Services Limited (PSEL), Meezan Bank Limited (MEBL) and Rafhan Maize Products Company Limited (RMPL) saw some positive sentiment, as they added 40 points, cumulatively.

Over 1.5 billion shares were traded with a total value of Rs29 billion. 

K Electric (KEL) was the market leader in volume, with over 341 million shares trading hands. However, KEL did end up losing around 9.09% of its share price.

Earlier on Monday, the index had lost around 925 points or around 1.4%. The index fluctuated within the range of 1,521 points, with a peak of 66,586 points and a low of 65,064 points.