Securities on the Pakistan Stock Exchange (PSX) plunged once again on Monday, an almost identical trajectory to the one witnessed on the previous trading day (Thursday), as rising Covid-19 cases in the country and rising political instability in the country, pushing the benchmark index down approximately 1,000 points within an hour of the opening bell.
The KSE-100 index was down 963.74 points at 38,924.26 by 12:55pm.
Commercial banks were among the top losers, followed by oil and gas exploration companies, cement, and oil and gas marketing companies.
“The market is under pressure due to the fear of a global lockdown amid rising coronavirus cases,” said Mohammad Sohail of Topline Securities.
“Overall sentiments are weak due to uncertainty on rising virus cases, falling oil prices and the likely impact of the US elections,” he added.
“The benchmark WTI oil price has fallen more than four per cent since last Friday to $34.5 per barrel, extending losses to approximately 12pc, on growing concerns that the rise in cases in Europe and the United States could hurt fuel consumption,” said Sherman Securities, a brokerage house.
Coronavirus cases have been on the rise in Pakistan. Last week, the number of daily Covid-19 cases surpassed the 1,000 mark for the first time since the end of July.
According to data from the National Command and Operation Centre, 1,123 people tested positive for the virus on November 1 out of a total of 27,953 tests conducted – which translates into a positivity rate of 4.02pc.
Meanwhile, the United Kingdom, Germany and France have announced lockdowns as cases in Europe doubled in the last five weeks with total infections surpassing the 10 million mark.
“A notable increase in Covid-19 cases together with declining oil prices triggered a risk-off mood with broad-based selling pushing the benchmark KSE-100 index to an intra-day low of 38,807 (down 2.79pc),” said Umer Farooq, an analyst at AKD Securities.
“Near-term outlook remains choppy with many uncertainties surrounding the Covid-19 situation and the US presidential elections likely to keep the market volatile,” he said.
Oil falls 4pc on fuel demand concerns
Oil prices fell four per cent on Monday on worries that widening coronavirus lockdowns in Europe would weaken fuel demand and amid concerns about turbulence over this week’s US presidential election.
Brent crude futures for January dropped $1.49, or 3.9pc, to $36.45 a barrel while US West Texas Intermediate (WTI) futures fell $1.58, or 4.4pc, to $34.21.
Brent fell as much as 5.8pc and WTI as much as 6pcin early trade, hitting their lowest levels since May. Countries across Europe have reimposed lockdown measures to try to slow Covid-19 infection rates that have accelerated in the past month.