The political melodrama wreaked havoc on the Pakistan stock market as the benchmark KSE-100 index slumped 1,250 points on the back of persistent uncertainty and the brewing constitutional crisis.
The political tides turned on Sunday after National Assembly Deputy Speaker Qasim Khan Suri rejected the no-confidence motion against Prime Minister Imran Khan and the premier recommended President Dr Arif Alvi to dissolve the National Assembly, which was accepted.
The KSE-100 index bore the brunt of the government’s actions and recorded a steep slide of 1,250 points to drop below the 44,000-point level.
The session began with a sharp drop as the benchmark index dipped to around 44,050 points in the initial hours. Puzzled by the twists and turns in the ongoing political turmoil, jittery investors rushed to offload their stocksholdings at the bourse.
Subsequently, the index remained in the negative zone throughout the day and touched an intra-day low of 43,824 points later in the session.
However, a brief buying activity towards the end helped recoup some of the losses.
At close, the benchmark KSE-100 index recorded a decline of 1,250.06 points, or 2.77 percent, to settle at 43,902.05 points.
Topline Securities, in its report, said that Pakistan equities witnessed a selling spree in the backdrop of political drama that took place on Sunday in the National Assembly, where the no-confidence motion was dismissed by the NA deputy speaker and subsequently the National Assembly was dissolved.
These developments dented investor confidence regarding the continuation of current economic measures, it said.
The KSE-100 index opened on a negative note, stayed in the red zone throughout the day and closed at 43,902 points.
“During the trading hours, investors opted to offload their positions in an environment of high uncertainty about the country’s political setup,” the report said.
“Cement, bank, technology and oil marketing companies’ stocks contributed negatively to the benchmark index where Lucky Cement, Habib Bank, TRG Pakistan, Pakistan State Oil and Meezan Bank lost 367 points cumulatively.”
On the flip side, Colgate-Palmolive (Pakistan), Highnoon Laboratories and Atlas Honda saw some buying interest as they added 34 points collectively, the report said.
A report of Arif Habib Limited stated that the KSE-100 index experienced a “bloodbath” throughout the day due to political uncertainty.
A significant decline was observed in market volumes as well, it said. “Across-the-board selling was witnessed. Main board volumes remained subdued. On the flip side, hefty volumes were recorded in third-tier stocks.”
Sectors contributing to the performance included banks (-324.5 points), cement (-52.9 points), technology and communications (-100.6 points), exploration and production (-93.5 points) and power (-69.2 points).
JS Global analyst Neelam Naz said that the benchmark index faced a “bloodbath” amid the political turmoil and closed at 43,902 points.
Major laggards were Lucky Cement, Habib Bank Limited, Pakistan State Oil, TRG Pakistan and Meezan Bank, she said.
Telecard Limited, K-Electric, TPL Properties, Ghani Global Holdings and WorldCall Telecom were the top contributors in terms of volumes.
“Going forward, we expect the ongoing political uncertainty to keep investor sentiment dampened,” the analyst said, adding “a buy-on-dip strategy is advised in value stocks”.
Overall trading volumes decreased to 170.5 million shares compared with Friday’s tally of 389.1 million. The value of shares traded during the day was Rs5.5 billion.
Shares of 305 companies were traded. At the end of the day, 26 stocks closed higher, 268 declined and 11 remained unchanged.
Telecard Limited was the volume leader with 17.4 million shares, losing Rs0.57 to close at Rs13.86. It was followed by K-Electric with 16 million shares, losing Rs0.18 to close at Rs2.92 and TPL Properties with 12.6 million shares, losing Rs1.56 to close at Rs19.26.
Foreign institutional investors were net sellers of Rs81.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan