Finance

Global rout in oil is major reason behind lack of investor confidence

Karachi, March 12, 2020: This was the second time during a week, when market halt triggered by 4 percent dip in KSE30 for 5 minutes around 2:13 PM, resulting in market halt of 45 minutes. The previous such session saw market declining by ~2300 points intra-day and today the halt came near ~-1400 points in the benchmark KSE100.

Global rout in oil as well as financial markets has been the major reason behind lack of investor confidence. Weakness in international crude prices tripped oil and gas chain, with both OGDC and PPL trading near lower circuits.

Although, PSO managed to form a base near yesterday’s opening price of 155, but slipped below that level in final half hour after market reopened. Selling activity, be it panic selling in Oil and Banks or profit booking in Cyclicals (Steel, Cement, Pharma), caused the index to close -1717 points (unadjusted) after sustaining a total loss of 1777 points during the session. Clearly, number 7 failed to be the lucky number here.

The Index closed at 35,957 points as against 37,673 points showing a decline of 1717 points (-4.6 percent DoD). Sectors contributing to the performance include Banks (-527 points), E&P (-237 points), Fertilizer (-234 points), Cement (-211 points), O&GMCs (-102 points).

Volumes increased from 217.6 million shares to 230.7 million shares (+6 percent DoD). Average traded value however, declined by 17 percent to reach US$ 62 million as against US$ 74.7 million.

Stocks that contributed significantly to the volumes include BOP, FCCL, MLCF, KEL and PIOC, which formed 38 percent of total volumes. Stocks that contributed positively include PAKT (+34 points), INDU (+21 points), PMPK (+9 points), SPWL (+4 points) and JDWS (+3 points). Stocks that contributed negatively include HBL (-162 points), ENGRO (-131 points), LUCK (-108 points), HUBC (-82 points), and BAHL (-74 points).

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