Karachi Stocks Down 157.74 Points:
KARACHI, June 12: At close of trading, the KSE-100 index was at 13443.72, down 157.74 points.
Worsening Pak-US relations hit stock market
Stocks dip on negative news flowKARACHI, June 12: Stock market went into a tailspin on Tuesday as nervous investors ditched equities on news a break off of talks by US with Pakistan on the Nato supply routes into Afghanistan.
The KSE-100 index breached critical resistance level of 13,400 points and dipped down by 171.90 points or 1.26 per cent to close at 13,429.56 points.
Investors feared worsening of the country’s relationship with US after reports quoting Pentagon spokesman George Little that the entire negotiating team would leave shortly.
The news that the Pakistan Army chief had declined to meet Peter Lavoy, the US assistant secretary of defence, added to the investor concerns over souring of relationship with US, that had been on the downslide since November when American helicopters killed 24 Pakistani soldiers and Pakistan closed routes for Nato military supplies to Afghanistan.
The Pentagon spokesman said that the US negotiating team was returning home “for a short period of time,” yet investors thought there was enough smoke to suggest a fire.
Selling erupted in equities across the board as local individuals and institutional Investors offloaded in haste. The “companies” group of
investors was the major sellers of $6.2 worth equity.
Mutual Funds extended some support by net buy of $10.28 million stocks. However, foreign fund managers also decided to opt out of the market with net shares’ sale of $3.60 million. Turnover, though representing slight improvement over Monday, was still so low as to blacken the mood in stock brokerage houses.
Equity dealer, Samar Iqbal at Topline Securities, noted that the share prices fell to 12-week low after news of Pakistan-US talks break off.
Cement and oil stocks fell sharply as investors believe that worsening Pakistan-US relations may affect investment climate. Volumes also remained on the lower side, because most of the investors were on the sidelines due to June ending closing.
Ahsan Mehanti at Arif Habib Corp also mentioned the break off of Nato negotiations which battered Pakistani stocks. Uncertainty in international equity markets and fall in global commodities affected the sentiments despite hopes for ease in macroeconomic issues after China agreed to place $500million with SBP, released pressure on current account and strengthen the foreign exchange reserves from depletion.
On the positive side, the news that for the first time ever, the country’s inflow of home remittances crossed $12 billion mark was ignored by investors.
The KSE-30 index plunged 188.43 points or by 1.60 per cent and Rs43 billion were wiped off the market capitalisation, which stood at Rs3.429 trillion at the close on Tuesday, from Rs3.472 trillion the previous day.
The shares that lost value stood at 196, more than twice the number of gainers at 75.
Volume of business edged up to 71 million shares on Tuesday with trading value at Rs2.724 billion, up from Rs1.691 billion the earlier day. Share in UniLever Pak plunged by Rs85.16 to Rs7162.50 and Millat Tractors lost Rs12.04 to Rs478.16.
Among the advancing issues, Rafhan Maize Products added Rs33.06 to Rs3126.71 and Siemens Pakistan receded by Rs15.13 to Rs675.13.
On the active list, Lucky Cement saw the highest volume of 5m shares, down by a massive Rs5.65 to Rs117.37. On the second slot stood Jah.Sidd.Co, lower by 41 paisa to Rs14.08 on 5m shares, DG Khan Cement — the other major stock on the sector — lost 81 paisa to Rs39.43 on 5m shares, PTCL slipped by 48 paisa to Rs13.89 on 4m shares, Hub Power Company slid 20 paisa to Rs40.22 on 4m shares, NIB Bank trimmed by 4 paisa to Rs1.99 on 3m shares, Fauji Cement declined by 9 paisa to Rs5.81 on 2m shares, Azgard Nine down by 21 paisa to Rs5.85 on 2m shares, Nishat Mills dropped by Rs1.27 to Rs47.25 on 2m shares and National Bank of Pakistan was down by Re1.02 to Rs42.55 on 2m shares.
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