KSE index slumps by over 300 points on political volatility

KARACHI: The Karachi Stock Exchange’s benchmark 100-index fell by more than 300 points to below 16,500 points on Wednesday on panic selling over political uncertainty in the country, said dealers.

Ahsan Mehanti, analyst at Arif Habib Corp, said that panic selling was witnessed at the KSE on rising political noise as political leaders called for a long march on January 14 for a powerful caretaker setup ahead of elections.

Security unrest in the country affected the sentiment. Indices recovered after record fall in the early session on the hopes for positive outcome of the meeting between the president and the prime minister with the religious leader to settle concerns over implementation of the constitution.

The KSE-100 index fell by 304.88 points, or 1.82 percent, to 16,489.99 points against 16,794.87 points recorded in the last session. The index, at one time, reached the high level of 16,808.13 points but could not sustain it, while the low level of the day was recorded at 16,379.52 points. The KSE-30 index declined by 219.20 points, or 1.60 percent, to 13,475.74 points during the session.

Contrary to the index, both turnover and value increased in the market. Turnover improved by 122 million shares to 241.22 million shares from 119.67 million shares, whereas value increased to Rs5.56 billion against Rs2.13 billion recorded in the last session.

Hasnain Asghar Ali, chief operating officer at Escorts Capital, said that the expected rise in political volatility amid planned sit-in and judicial hearing from the next week onwards, coupled with the law and order concerns, the local equity market underwent a massive adjustment, 3.83 percent from recent high and 2.6 percent on intraday, sounds of foreign selling kept the pressure intact, thus, forcing the index to breach major technical support levels.

Although the selling intensity stayed on the rise throughout the session, opportunities arising out of low volume price erosion were conservatively capitalised. Extensive sell-off that led to rise in the turnover contribution by frontline stocks did inspire technical signal for retrenchment, shortcovering coupled with relatively aggressive buying in the dividend yielding frontline stocks, thereby, offered some break, he said.

Fahad Ali, analyst at JS Research, said that after giving a positive to neutral opening, the index remained in the red zone for the rest of the day, touching the low of 16,379 points by breaking all technical support barriers as individual and institutional investors chose to book profits and liquidate their positions.

“Another reason for the KSE taking a bloodbath today was the uncertainty building up of the political situation in the country,” he said.

Highest increase was recorded in the shares of Unilever Food, which increased by Rs100 to Rs4,400 per share followed by Unilever Pakistan, which rose by Rs69.38 to Rs10,069.38 per share. Major decline was witnessed in the shares of Nestle Pakistan Ltd, which fell by Rs133.33 to Rs4,600 per share followed by Bata (Pakistan) that declined by Rs59.50 to Rs1,241.50 per share.

Stocks that recorded significant turnover included Jahangir Siddiqui Co, Byco Petroleum, Pakistan International Airlines, Fauji Cement and the Bank of Punjab. Jahangir Siddiqui Co was the volume leader with a turnover of 15.31 million shares as it went down by 81 paisas to close at Rs14.77 per share, followed by Byco Petroleum with a turnover of 13.89 million shares as it declined by Re1 to Rs13.10 per share.

Shares turnover in the futures market increased to 10.89 million shares from 3.30 million shares traded in the previous session. Of 364 companies’ shares traded, 31 advanced, 326 declined and seven remained unchanged.

Unilever Pak Rs509.25

Closing Rs10,694.25

Unilever Foods Rs210.00

Closing Rs4,410.00

Colgate Palm Rs65.00

Closing Rs31,365.00

Mitehells Fruit Rs16.00

Closing Rs350.00

Exide Pak Rs15.14

Closing Rs314.86

Sunrays Tex Rs9.05

Closing Rs171.95

Posted in: Business news