Just over an hour after the start of the session, the benchmark 100-share index took a 1,214-point nosedive from 31,001.49 to 29787.27 ─ a drop of 3.91 per cent.
Following the plummet, shares picked up again marginally, reaching a level of 29,969.29.
The newly-integrated national bourse has taken a hit on the back of falling global stock prices and low crude prices. Oil prices today slid to their lowest since 2003 after economic sanctions on Iran were lifted on Sunday.
Topline Securities CEO Mohammad Sohail says the slump in share prices comes on the back of a “fall in overall capital markets in the region”, as well as “a drop in oil prices after the sanctions on Iran were lifted”.
Stock market sources say the Federal Investigation Agency’s (FIA) action against brokers and firms is also to blame for the dismal index performance.
The PSX board of directors is scheduled to meet later today to consider direct involvement of the FIA in the affairs of the exchange.
A source at the exchange on condition of anonymity earlier said that big brokers were throwing their weight behind the board to demand that the FIA first consult and take the chief regulator, Securities and Exchange Commission of Pakistan (SECP), into confidence before moving against a stockbroker or his firm and its officials.
However, the slide in the value of shares at the PSX has little to do with notices and investigations into stock brokerages and the recent arrests of some officials of a brokerage firm, and more to the meltdown in global markets due to slump in international oil prices and the troubled Chinese economy, some market participants have said.
Over the past week, the stock market rout deepened as the benchmark 100-share index plummeted by 1,534 points.
The PSX in its first week of trading was caught in a strong selling storm in tandem with world equity markets as investors lost their nerve over the sharp drop in crude oil prices, exacerbated by worries over the health of the Chinese economy.
Local investors went into panic selling as news of notices to some stockbrokers by regulators further dampened investor sentiment.
Dealers at Topline Securities said almost all the sectors closed the week in the red, with the only increase seen in equity investment instruments and household goods.
Sep 28, 2016 0
Special coverage on China's Two Party Sessions by The Daily Mail - People's Daily