Amid economic fears and rumours, PSX plunges over 1,900 points

  • This was the largest weekly fall in 67 weeks

KARACHI: The capital market recorded a drop of more than 1,900 points, largest weekly fall in last 67 weeks, owing to more than expected rise in benchmark interest, fear of devaluation, rumours of cabinet shuffle and falling foreign exchange reserves, hinting thick clouds hovering on the country’s economy.

The outgoing week was an unsatisfactory one for the benchmark index as developments like interest rate hike and rupee devaluation along with lack of triggers kept the benchmark index under selling pressure, said an analyst from Topline Securities.

The index declined by 4.8pc or 1,934 points, closing at 38,562 level. Market activity remained dull during the week with average traded value declining by 18pc to $53 million despite 7pc higher average daily traded volumes, reflecting concentration of activity in penny stocks.

The oil sector remained under pressure during the week, chipping away 279 points from the index. The sector was only second to commercial banks, which, despite the 150bps interest rate hike, fell victim to the negative sentiments of the market as the sector ate away 343 points.

The cement stocks were down 5.6pc during the outgoing week due to 14pc decline in dispatches in November 2018, where local offtake remained particularly dismal. Nevertheless, after a depressed outlook for the most part of the week, the cement stocks recovered on Friday owing to news regarding beginning of construction work on Diamer-Bhasha and Mohmand Dams from Jun-19 and Mar-19, respectively.

Foreigners selling for the week stood at $2.5 million versus $51 million in the previous week. This was their 31st week of consecutive selling.

In the coming week, Prime Minister Imran Khan would be visiting Karachi to address macroeconomic concerns and take businessmen into confidence. Albeit expect the market to be ranged bound next week, said an analyst from Arif Habib, adding that attractive valuations could revive investor’s interest.