KARACHI: Karachi capital market failed to sustain the pressure of political uncertainty in the first post-Ramazan trading session on Monday and dipped by 666.24 points.
The announcement of a mourning day by Tahirul Qadri fuelled ongoing political uproar, which dragged the market into the red zone and it dipped by 666.24 points, dealers said. Argentina’s defaulting coupled with downward trend in foreign markets pushed the Karachi Stock Exchange (KSE)-100 index 666.24 points down to close at 29,647.83 points as compared to 30,314.07 of previous session. Prominent businessman and AKD Group Chairman Aqeel Karim Dhedhi said, “Tahirul Qadri’s speech, ‘Azadi’ (freedom) March of Pakistan Tehreek-e-Insaf (PTI) on August 14 and Argentina’s defaulting on its payments were the key variables in Karachi capital market’s breakdown”.
He said the current worldwide descending spree in equity markets also came in the local bourse, however foreign inflows in KSE remained healthy, as local panic selling was seen mainly in mutual fund sector. Criticising the government’s role Dhedhi said government institutions should create some activity in the market to stabilise the stock market’s sentiments. He said since the government earns huge sums from equity markets, it should invest in the markets during correction time. He said current rulers have failed to perform on every front, including political and financial.
Commenting on the situation, senior TV anchor and analyst Azhar Batla said, “Rising political temperature taking its toll triggered panic among local investors as they opted selling while benchmark settled at typical correction.” He said after extended holidays the session did not bring much surprise, as international and regional markets observed downfall during the past week, thus it was expected that the local market would remain weak. He said foreign investors’ seemed to be unruffled while local players could not sustain pressure that came from the political front, as market witnessed bearish trading.
Batla opined that the market was likely to remain under pressure until clouds over political front disperse, adding that the ongoing political conflict could lead to a huge blow in the equity market, as any unanticipated international event could happen amid existing fear in local markets. He said the market lost sufficient points apparently, but in real it was merely two percent correction, so if the market remains under 10 percent it would be normal range, yet in current scenario a disaster could occur. He said the market is always volatile in times of political instability.
Senior analyst at Habib Metro Financial Services, Amreen Hirani said, “The local bourse went for one of its brutal thrashing since September 2013, as it throttled down 2.20 percent, the battering was led by the heated-up political environment in the country where PTI’s march on Independence Day coupled with mourning week announced by Pakistan Awami Tehreek had brought investors to expect situations to worsen from here.” Investors seem to outweigh the political situation in the country over the result season at present. “We, however, highlight dividend players coming back to attractive yields as an opportunity to invest in safe bets,” said Hirani.
KSE-30 index fell by 454.78 points to close at 20,626.45 against 21,081.23 points of last closing. The market volume increased by 116.06 percent to 223.875 million shares traded on Monday as compared to 103.619 million shares traded in previous session. The overall market capitalisation fell by 1.80 percent and traded Rs 6.992 trillion as compared to Rs 7.120 trillion of previous session. Losers outnumbered gainers 310 to 39, while 13 stocks were remained unchanged amidst the total 362 stocks traded. The KMI 30 index lost 1214.59 points to close at 47,768.29 points as compared to 48,982.88 points of previous session.
KARACHI: Pakistan Peoples Party Chairman Bilawal Bhutto Zardari has alerted the patriotic people of ...