Trump’s, Tahir-ul-Qadri’s decisions hit Pakistani stocks

Political landscape tense as Trump recognises Jerusalem as Israel's capital, PSX closes 17-month low to 38,784 points

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KARACHI: The Pakistan Stock Exchange (PSX) Thursday closed 17-month low at 38,784 points after losing 1123 points amid the rising tension between Pakistan and US and fear of more sit-ins in the country following the announcement of American President Donald Trump to shift the US Embassy in Jerusalem.

The benchmark KSE 100 index, after losing 1123 points, closed at 38,784 points from an earlier close of 39,907 points on Wednesday. The investors lost Rs 178 billion during a day trading as the market capital stood at Rs 8.257 trillion compared to Rs 8.435 trillion a day ago.

The analysts of the brokerage houses were of the view that the big institutions of the country sold their stocks on Thursday as they think after the announcement of the US President Donald Trump and local political and religious parties will start protest throughout the country on the issue of Jerusalem. Meanwhile, Tahir-ul-Qadri and other religious parties had also given protest call to his workers in Punjab and Islamabad.

The analyst said there was an interest of the buyers in the market but at low cost as the turnover remained exceptionally high,  with around 163 million shares worth only Rs 6.23 billion traded.

Out of a total of 363 traded scrips, 46 advanced while 301 declines and 16 remained unchanged.

All key sectors including major blue-chip item fared worst performance with PSO, Engro, LUCK, OGDC, HBL, UBL MCB and DGKC led the slide. Top 10 Index point decliners were HBL (‐3.9 per cent), UBL (‐4.8 per cent), ENGRO (‐3.4 per cent), OGDC (‐2.2 per cent), PSO (‐5 per cent), POL (‐3.2 per cent), FFC (‐3.8 per cent), HUBC (‐3.1 per cent), MCB (‐2.3 per cent) and LUCK (‐2.3 per cent), withholding 523 points, while 8 stocks closed in the green adding just 18 points.

Analyst of Topline brokerage house said besides the issue of Jerusalem and threats of Tahir-ul-Qadri to sit-in in Lahore and Islamabad, another issue was the margin call for the brokerage houses to deposit the marginal cost. Oil was also down in the international market so the stocks of the oil companies were also down on Thursday, he added.

“However, the big institutions were trying to save their money as the market may further slide in future,” another analyst of Inside Securities said.

He said the market is 17-month low as it was on the same level on July 11, 2016. The market may come again in between 40,000-41,000 after this shock in next few days where the investors will try to maintain it.

If we will see the market sentiments, he said, which are low because of the Donald Trump’s announcement to make the Jerusalem as the capital of Israel and this will not be tolerated in Arab countries including Pakistan.

Traditional US allies are among a growing chorus condemning President Trump’s decision to recognise Jerusalem as Israel’s capital. Saudi Arabia called the decision of Trump as “unjustified and irresponsible”, while France and the UK said they did not support the decision. But Israeli PM Benjamin Netanyahu hailed it as “historic” and said he was sure more countries would follow suit. President Trump’s move reversed decades of US policy on one of the thorniest issues between Israel and Palestinians.

Meanwhile, Chief of Pakistan Air Force (PAF) Air Chief Marshal Sohail Aman has said that the PAF has been given orders to shoot down any drones, including those of the US if they violate the country’s airspace.

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