Daily Times

Pakistan stock exchange registered a volatile session as it retreated after global markets took a plunge following Iranian missile strikes at US military bases in Iraq. Benchmark KSE-100 pared yesterday’s gains as Index stumbled and finished at 41,357 level by losing 547 points or 1.31% from yesterday’s close. The global markets were roiled after Iran fired more than a dozen missiles at two Iraqi military bases hosting US troops, the Pentagon confirmed. The missiles targeted the Ain al-Assad airbase in Anbar province and a facility near Erbil’s airport in northern Iraq in retaliation for the killing of top Iranian commander Qasem Soleimani by the United States.

The KSE-100 Index, which opened at 41,493.63, slid to its intraday low at 41,173.95 after losing 730.52 points. The KMI-30 Index declined by 641.27 points to end at 67,546.41, while the KSE All Share Index fell short by 364.90 points, closing at 29,010.85. Out of the total traded shares, only 42 advanced while 267 declined.

The overall trading volumes improved from 206.89 million in the previous session to 280.07 million. The volume chart was led by K-Electric Limited, followed by The Bank of Punjab and TRG Pakistan Limited. The scripts had exchanged 39.46 million, 38.19 million and 11.55 million shares, respectively.

Sectors that pushed the index into negative territory include banking sector losing 147.62 points, oil & gas exploration 77.29 points and power generation & distribution 61.61 points. Among the companies, Habib Bank Limited, Pak Petroleum Limited and Hub Power Company Limited plucked off most of the points off the index.

The sectors that supported and managed to push the index into green territory for a while, includes Investment Banks with 29 points and Food & Personal Care Products with 9 points. Among the companies Dawood Hercules Corporation Limited contributed 37 points followed by Lucky Cement Limited with 32 points, National Foods Limited with 11 points, Faysal Bank Limited with 8 points and Mari Petroleum Company Limited with 6 points.

Meanwhile, The State Bank of Pakistan conducted auction in which it sold PIB’s worth Rs.162.927 Billion for 3, 5, and 10 years in fixed and floating rate bonds. Cut off Yields for 3 and 5 year PIB’s remained unchanged at 11.75 and 11.1938 percent while the 10 year cut off decreased by 9 basis points to 10.90 percent. The bids for the 20 year PIB was rejected.

The combined auction target was Rs.150 billion while the maturing amount was nil. The SBP accepted Rs.103.37 Billion in fixed Rate PIBs and Rs.58.05 Billion for the 10 year floating rate PIB. In the fixed rate auction, the SBP received bids worth Rs.77.56 billion for 3 years, Rs.81.50 billion for 5 year and Rs.24.24 billion for 10 year, out of which the central bank accepted Rs.23.5 billion for 3 years, Rs.54.90 billion for 5 years and Rs.20.04 billion for 10 years. In the floating rate bond auction, the SBP received bids worth Rs.87.05 billion out of which the SBP accepted Rs.58.05 billion at a cut off price of 101.8543.In addition to the above the SBP picked up an additional Rs.5.437 Billion in Non-Competitive Bids and through short selling making the total accepted amount Rs.162.927 Billion. In Asia, stock markets tumbled across the region. Investors’ confidence was upended fearing wider conflict in Middle East sending them into panic selling.

In Japan, the Nikkei 225 led the losses as it eased from earlier declines of more than 2% to close 1.57% lower. Japanese Prime Minister Shinzo Abe also canceled a scheduled trip this weekend to the Middle East. The Shanghai composite index was down 1.22% at 3,066.89, the Shenzhen composite fell 1.24% to 1,769.58. Hong Kong’s Hang Seng and Seoul’s Kospi also lost 0.83% and 1.11% each. In India benchmark S&P Sensex was also down 0.44% while the Nifty 50 clocked 0.54% lower.

Meanwhile, international Oil prices dropped, reversing an earlier spike, after Iran’s rocket attack on American forces in Iraq failed to destroy major energy infrastructure that could have disrupted global crude supply. Following an initial spike, oil retreated from highs to turn negative as it became clear no energy infrastructure was targeted. There were no reports of casualties so far either, leading traders to believe maybe there will not be a wider conflict between the U.S. and Iran that could hamper oil flows. International benchmark Brent crude fell 1.5% to $67.26, a marked reversal after at first climbing more than 4% immediately after news of the attack. The initial surge in response to news of the attack sent Brent up to a high of $71.75 per barrel, its highest since September. US West Texas Intermediate crude dropped 1.9% to $61.5 in a similar move, sinking from an initial 4.5% spike. WTI crude hit a session high of $65.65 immediately after the attack, its highest level since April. The pullback from the initial rally reflects easing fears about the risk of a spiraling tit-for-tat conflict between the United States and Iran. Investors are breathing a sigh of relief that Iran’s attack failed to cause any damage and has so far not drawn any fiery response from U.S President Donald Trump.