Stock market closes 510.13 points down amid heavy selling

Investors had been expecting a financial assistance package from China in the short-term

KARACHI (Dunya News) – Equities recorded tremendous jolt on the first day of the new week ending the eight sessions gain as the hopes of investors received a set back because of the joint statement of Pakistan and China on did not highlight the much talked package of around $6 billion.

The capital market opened on a negative note and immediately after half an hour trading received heavy tremor and index at one point saw slide of more than 800 points where 100 index reached the low of 41033 points.

KSE-100 index closed with a loss of 510 points to 41493 points.

Shumaila Badar, head of research at Ismail Iqbal Securities said that the KSE-100 Index retreated sharply in the morning due to disappointment over the outcome of Prime Minister s visit to China. Investors had been expecting a financial assistance package from China in the short-term. The market later recovered on the back of certain auto and chemical stocks.

“We expect the market to be mixed in the session ahead”, she said.

According to one of the main factors behind this slide was the joint statement which did not carry a single word about the package where last week all the investors and traders pinned hope that the country would get similar package as received from the Saudi Arabia government.

Another factor which trimmed the share values was the inflation rate of October which touched the four year high. One the leading market observers that the statisticians while calculating the inflation numbers have incorporate the gas numbers which should be realistically effective from October and November numbers should reflect the gas price increase.

Before the close of the session the market received some support from the financial institutions on the development that IMF team would be arriving this week to talk about the bail-out package. The government would likely to seek financial assistance of $5 billion to $6 billion to help support balance of payments position from the IMF.

Already the country has raised the gas and electricity prices, depreciated the currency and increase the benchmark interest so it is hoped that the conditions to get the bail-out package would likely not to be stricter ones.