KARACHI: The Karachi Stock Exchange saw a steep fall on Monday as sentiment was hit after a weekend of violent clashes between police and anti-government protesters.
The benchmark 100-share Karachi Stock Exchange index fell 4.46 percent, or 1,309.09 points, to 28,071.41. Investors dumped shares after activist cleric Tahirul Qadri announced on Sunday that his supporters would join opposition politician Imran Khan’s protest on Thursday. Both men have called for the government to resign and Qadri has promised to bring it down by the end of the month. The stock market has a floor that allows stocks to devalue at a maximum of 5 percent per day.
But although most investors sold, some buying was seen by investors betting that the crisis would be resolved, said Samar Iqbal, a dealer at Topline Securities. Pakistan State Oil Co Ltd fell 5 percent to 365.28 rupees while Pakistan Petroleum Ltd was down 3.85 percent to 217.80 rupees. The rupee ended weaker at 98.90/99.00 against the dollar, compared to Friday’s close of 98.76/98.81.
The KSE 100-index crashed over political turmoil as the benchmark plunged by 1309.09 points or 4.5 percent to close at 28,071.41 points as compared to 29,380.50 of previous session. KSE-30 index fell by 892.02 points to close at 19,537.67 points as against 20,429.69 points of last closing. KSE-100 index saw an onslaught of almost 700 points on December 31, 2007 over the assassination of Pakistan Peoples’ Party’s chairperson Benazir Bhutto.
The prevailing tension over political front seems no signs of easing and investors are loosing control over their nerves, which is leading to a declining trend in local bourse. An analyst at Habib Metro Financial Services, Muhammad Sultan Mahmood, said, “The market was in a free fall mode as the index lost 1,309 points amid severe selling pressure as the heightened political turmoil got the better of investor’s nerves”.
The market took a nosedive amidst a turnover of 216 million shares, which indicates panic selling and a buying on dips strategy by smart investors. Qadri’s decision to align his protest with that of Imran Khan on the upcoming Independence Day is widely believed to be the final blow to the incumbent government, he added. The ongoing political logjam has also heightened the possibility of derailment of democracy, added Mahmood. The sum of all these fears is likely to keep the bourse severely volatile whereby another jolt may be in the offing.
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