Bears returned to the Karachi Stock Exchange as the KSE-100 nosedived yesterday to close the trading session under 41,000 points for the first time during the current fiscal year.
The benchmark witnessed a dull trading session during the first half, however later in the day, things went from bad to worse as big stocks experienced price drops due to massive institutional selling which was compounded by a lack of buyers. Specifically, KSE-100 recorded a fall of 431.34 points or 1.04 % to close at 40,958.65 points.
While some institutional and high net-worth individual investors saved several notable stocks such as Engro and UBL, it wasn’t enough to stem the tide, and bring a positive trend in the index.
According to Elixir Securities, the fall in KSE-100 index will adversely impact equities across the country as it falls to a new 11-month low because of institutional sell off.
“Market opened sideways and struggled for direction in early hours as notable index names saw range-bound trading with lackluster activity,” the report stated.
Stocks that stand their ground include Engro Corp (+2.5%), United Bank Limited (+1.1%), and Pakistan Petroleum (+0.9).
“[We] expect market to remain dicey and trade volatile on Friday with institutional activity, primarily from foreign investors, likely to be the only savior in days ahead,” Elixir added.
Faisal Mamsa (CEO Landmark Investment) commented on the drop and said that “sentiment at the stock exchange is broadly bearish based on multiple factors including developments in our political spheres, the ebb and flow of news on the North Korea front, strong expectations of a devaluation in the Pakistani Rupee and a strained relationship between SECP and Brokers. Having said this, valuations are now quite attractive and even if we see further losses, people with a long term view should buy at dips.”
In any case, keeping checking back for more updates as we cover the news.