KARACHI: Stocks sank further on Friday with the Karachi Stock Exchange’s (KSE) benchmark 100-share index taking a plunge of 699.82 points (1.99 per cent) to close at 34,519.77.
Over the week, the index tanked 3.94pc, representing a loss of 1,417 points.
The index touched an intra-day low of 34,275.45 points — a fall of 945 points compared to Thursday’s close. But then it clawed back a bit as some sense prevailed to calm down investors who had gone into panic selling.
The major reason for the stock meltdown was the same on Friday as throughout the week: incessant selling by foreign investors who offloaded stocks worth $5.89 million, which put the portfolio outflow for the week at a huge $43.6m. Volume increased to 314m shares of the trading value of Rs13.9bn from previous day’s 282m shares valued at Rs10.7bn.
Among local participants, mutual funds disposed of equity valued at $6.68m to salvage their ‘capital protected funds’.
Individuals, known to be panic-prone herd, dashed out with the sale of $5.08m worth stocks as they saw the index going into a tailspin in mid-day trading.
Analysts at a major brokerage house stated that the stocks plunged due to foreign selling, in line with meltdown in global equity markets. A couple of stocks moved against the trend, but generally it was red splashed all across the board.
“Moving forward, we expect the volatility to continue as the roll-over week starts on Monday. Liquidity can be expected to be low throughout the next week,” the experts cautioned.
Analyst Ahsan Mehanti at Arif Habib Corp attributed the panic-selling at the market to global commodities slump. “Major fall in global stocks after WTI [West Texas Intermediate] crude plunge below $41 per barrel and financial turmoil in China played a catalyst role in bearish activity.”
AKD weekly report stated that the decline was primarily driven by foreign selling on the back of overall downturn in the Chinese economy.
KASB Securities said in their weekly report that the index fell 4 per cent amid worsening political backdrop and distress selling by both foreign and local investors.