KARACHI: The stock market faced a steep drop on Monday as it took cue from international markets, which went down on fears of global economic slowdown over the next six to eight months.
Similar sentiments echoed across world markets with sell-off in equities in Asian markets including India’s Sensex (-0.9%), Japan’s Nikkei (-3.01%) and China’s Shanghai Composite (-1.97%).
The KSE-100 index plunged from the moment trading began because of weak domestic cues with investors anticipating a drop in policy rate in the monetary policy announcement later this week.
Investor participation remained unsatisfactory as trading volumes dropped to new lows. The KSE-100 index continued its downward trajectory as the absence of triggers meant no respite from the selling pressure.
At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 403.21 points, or 1.05%, to settle at 38,128.66.
Topline Securities’ analyst said the decline in the index could be due to the impact of global markets where negative factors like unsatisfactory manufacturing data in Germany and announcement by the US Federal Reserve that it would not raise interest rates this year pushed markets down.
Dow Jones sank 1.8%, S&P 500 was off 1.9%, Nikkei fell 3.01% and Shanghai Composite fell 2%.
“Investors stood on the sidelines as traded volumes hit a 14-month low at 56.5 million shares (the lowest since December 2017). Traded value also dropped to the lowest in 10 months,” the analyst said.
The exploration and production sector dragged the index down the most, chipping away 98 points as the West Texas Intermediate (WTI) crude price fell 2.4% from the previous day. Similarly, cement and fertiliser stocks cumulatively erased 126 points from the index.
Overall, trading volumes decreased to 56.5 million shares compared with Friday’s tally of 84.6 million. The value of shares traded during the day was Rs2.7 billion.
Shares of 322 companies were traded. At the end of the day, 61 stocks closed higher, 241 declined and 20 remained unchanged.
K-Electric was the volume leader with 5.5 million shares, losing Rs0.25 to close at Rs5.39. It was followed by WorldCall Telecom with 3.7 million shares, losing Rs0.06 to close at Rs1.08 and The Bank of Punjab (XD) with 3.6 million shares, losing Rs0.07 to close at Rs13.01.
Foreign institutional investors were net sellers of Rs9.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.