Share prices bleed after robust opening
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The gains made during the last two sessions proved to be short-lived, as the trading floor at Pakistan Stock Exchange (PSX) gave the impression of a slaughterhouse with the KSE-Index shedding 1,076.82 points on Tuesday.
By the time the trading was closed for the day, the KSE-100 Index stood at 32,422.83 after starting from the level of 33,499.65.
The early trading set the tone as the index was down by 822.08 points within a few minutes. However, the market started making some recovery and reduced the losses to 323.08 points followed by more fluctuations till 2:03pm after which everything moving downward.
Hence, the market a suffered a 3.21 percent loss on Tuesday, meaning the index has contracted by 20.41 percent since January 1.
This trend at the stock market was witnessed as the oil prices in the global markets witnessed a crash, shattering the investors’ confidence.
Earlier, the price on the futures contract for West Texas crude due to expire Tuesday fell into negative territory – minus $37.63 a barrel. Hence, the sellers were actually paying buyers to take the stuff off their hands.
This unprecedented slump came as the oil producers do not have the capacity to store the produce as consumption is down to a record low due to the lockdowns around the world after the coronavirus pandemic.
Earlier on Monday, the PSX ended the session on a strong note as the KSE-100 Index closed at 33,499.65 after gaining 667.82 points.
The market witnessed correction after a volatile beginning as index at one point had jumped to 33,875.54 with a gain of 1,025.71 points after starting from the level of 32,831.83.
At the onset, it looked that the trading session would be a repeat of Friday when the market had gained 1,502.37 points, but the market started experiencing the opposite after reaching the high point of 33,857.54.
On Friday, trading was halted at the PSX after the KSE-100 jumped by 1,559 points (5 percent). Although the market has repeatedly witnessed trade suspension since the beginning of March because of losses, this application of the mechanism was first in the case of upward movement.
These temporary positive sentiments at the were a result of the 200 basic points cut in the policy rate by the State Bank of Pakistan last week, which has been a demand of businessmen for the last many months.