KARACHI: Stocks were massacred as the index plummeted over 700 points in intra-day trading, falling to a five-year low level of below 30,000.
The downtrend was seen on back of ongoing geopolitical tensions and the outcome of the National Security Committee (NSC) meeting, which added to the already frayed investor sentiments.
Following India’s decision to abrogate Article 370 of its constitution, which gave the Himalayan region a special status, the Pakistan government decided to downgrade diplomatic ties with India.
Participants reacted to this development with panic, opting to offload stocks in sectors across the board.
At 11:44, the KSE-100 Index – a benchmark for market performance – was down 750.32 points or 2.48% to stand around 29,527.13.
The KSE-100 Index fell below 30,000 after almost five years, Topline Securities CEO Muhammad Sohail said in a comment to media.
“Today’s main issue is the suspension of trade ties between Pakistan and India,” Ahsan Mehanti at Arif Habib Limited told media.
Pakistan suspended trade and diplomatic ties in a reaction to Indian move of having forcefully counted Kashmir as its territory against the will of the area people.
“The market has gone deep down due to emergence of Kashmir issue between the two countries,” he commented, adding that the escalation in political tension remained a big concern for the market.
Mehanti added that the drop in international oil prices also mounted selling pressure in the relevant stocks.
“The market has completely ignored improvement in Pakistan’s cross border trade deficit for the month of July.”
Earlier, the market finished five successive sessions in red amid aggressive stock selling by mutual funds. Investors in such funds wanted their money back as no improvement had so far been witnessed at the Pakistan Stock Exchange (PSX).
Arif Habib Limited Head of Equity Sales Saad bin Ahmed had said that technical analysts anticipated the market will fall to 25,000-28,000 points.
