Karachi: The stock market has plunged by 1299 points on Thursday that can be attributed to surge in corona virus cases in the country.
The Pakistan Stock Exchange (PSX) experienced a sharp decline of 1299 points on Thursday, closing at 39,888 points compared to the previous day’s 41,187 points. The downward trend was attributed to various factors, including a surge in coronavirus cases, partial lockdowns in Pakistan, lockdowns in European countries, the end of the roll-over week, the conclusion of the result season, and a global sell-off in both stock and commodity markets.
Analysts from Arif Habib Limited noted that the increasing incidence of COVID-19 cases created uncertainty and led to a cautious market sentiment. The partial lockdown measures in Pakistan, coupled with similar restrictions in Europe, added to the concerns. The end of the roll-over week and the conclusion of the result season further fueled the negative sentiment, contributing to the market’s overall loss of 1911 points during the trading session.
During the trading day, the KSE-30 index experienced a 5 percent drop, triggering concerns about a potential market halt. However, the index managed to reverse its trend before reaching the maximum allowed limit of 2:30, preventing a market halt.
Selling pressure was widespread across the board, with the Exploration & Production (E&P) and Banking sectors witnessing heavy selling. Several stocks in these sectors reached or neared lower circuit levels. UNITY emerged as the most traded stock, with a volume of 60.5 million shares, followed by MLCF (39.1 million) and PIBTL (38.6 million).
Key sectors contributing to the overall market decline included Banks (-256 points), E&P (-195 points), Fertilizer (-126 points), Cement (-102 points), and Oil & Gas Marketing Companies (O&GMCs) (-100 points).
Market activity saw a notable increase, with trading volumes rising from 368.5 million shares to 541.8 million shares, representing a 47 percent day-on-day increase. The average traded value also surged by 34 percent, reaching US$ 126.9 million compared to the previous day’s US$ 94.5 million.
Significant contributors to trading volumes were UNITY, MLCF, PIBTL, HASCOL, and FCCL, accounting for 37 percent of the total volumes.
While some stocks managed to contribute positively to the index, including PAKT, ICI, SCBPL, MUREB, and ATLH, others had a negative impact. Stocks such as PPL, ENGRO, POL, HBL, and HUBC were among the top contributors to the negative trend, collectively accounting for a substantial decline in the index.
The market’s reaction reflects the challenges posed by the current global and local economic environment, emphasizing the need for investors to closely monitor developments and adapt their strategies accordingly.
