Karachi: The results of the Senate sent some chilling signals to investors that a trading frenzy swept the market, wiping out about 2% of the 100-point index, and dozens of companies’ stock prices closed down.
The KSE-100 index marked a bloodbath session today after the senate election results, where against odds the opposition party emerged victorious on the key senate seats. “Investors also feared over covid-19 third wave that caused 75 deaths yesterday (highest in 3 months) along with rise in PIB yields (20-40bps) in the auction held last day” said Zaid Aftab research analyst at Pearl Securities.
There was no such positive news on both local and int’l front that could lend support to the bourses. As a result, the market made intra-day low 45,088 (-1,073) to close at the levels of 45,279 (-882 pts). Going forward, “we expect the market to remain bearish until the PM gets a vote of confidence from Parliament on Saturday” he said therefore, we reiterate our stance and suggest our investors to go for the “Sell on Strength” strategy in the coming days.
KASB Securities, managing director of A.A Soomro, said that the stock market plunged 800 points and 21 billion rupees worth of shares were traded, causing the stock market to plummet. The distress of the failure of the Treasury Secretary’s Senate election shocked political stability.
The number of seats in the ruling coalition is less than expected. More importantly, the opposition parties see it as a victory. Fearing low morale, the prime minister called for a vote of confidence on Saturday to resolve the uncertainty once and for all. Some opposition lawmakers said that they also do not want to hold general elections in advance.
PTI has nominated Sadiq Sanjrani (ex Chairman) for the post for Chairman once again to reduce risks of further upset.
The stock market started near the lowest level, but recovered only moderately, but fell sharply again by the end of the year. Due to growing concerns, almost all blue chip or growth stocks closed down 3-4% today. However, we believe that the Prime Minister may be able to win a vote of confidence, and Sadiq Sanjrani may win enough support for the chairmanship.
We expect tomorrow to be flattish to red although as inertia of selling lingers on. Monday should start on a good note, said Soomro.
“Investors sold in Panic ahead of official senate election results along with the uncertainty over the confidence vote for PM in National Assembly on Saturday”, said Muhammad Saeed Khalid, head of research at Shajar Capital.
The unofficial result of the Senate election plunged the KSE100 index into a downturn, with the benchmark index plummeting 1,074 points earlier today. Saeed Khalid said that in addition, the rise in COVID19 cases among PSL participants and the uncertainty of the country’s economic activities have also pushed down the trading volume of the KSEALL stock index.