The stock market on Thursday came in for heavy selling as the benchmark KSE-100 index dived 625 points amid a string of corporate result annoucements.

Government’s decision to abolish tax exemptions worth up to Rs200 billion in corporate income tax to meet the stringent conditions laid down by the International Monetary Fund, shook investor confidence and triggered panic selling at the bourse.

In addition, the upcoming Financial Action Task Force (FATF) meeting weighed on investors’ mind, who resorted to cautious trading. The FATF is due to take decision on whether Pakistan will enter the white list or not.

Following a brief open in the positive, the KSE-100 index began its decent in initial trading. During the day, all index-heavy sectors faced massive selling and the decline accelerated towards the close which inflated the losses.

At close, the benchmark KSE-100 index recorded a decrease of 625.40 points, or 1.34%, to settle at 46,142.74 points.

Arif Habib Limited, in its report, stated that the market saw aggressive selling after a string of financial results, which showed consistent earnings but lower-than-anticipated dividends.

The banking sector saw major attrition with extensive selling whereas profit-booking was noted in cement, oil and gas marketing and exploration and production sectors.

Overall, the index shed 648 points during the day and ended down by 625 points. Important results announced during the session included Engro, PSO and Meezan Bank, but the market closed at a low ebb due to general disappointment, the report said.

JS Global analyst Danish Ladhani said the equity market was in the grip of bears as profit-booking dragged the index lower.

The index fell 1.3% to 46,143 points as institutions were mainly engaged in selling stocks, which kept the market under pressure. Total traded volume was 578 million shares.

“Due to the previous rally in the cement sector, there was profit-taking on Thursday as well,” he said. “Textile exports continued to thrive in January 2021, increasing 11% year-on-year to $1,323 million.”

Among corporate result announcements, Faysal Bank (-6.5%) declared earnings per share of Rs4.29 on an unconsolidated basis for the year ended December 31, 2020.

Board of directors of Meezan Bank (-3.4%) recommended final cash dividend of Rs2 per share, which was in addition to the already paid interim dividend of Rs4 per share. Its earnings per share stood at Rs15.67.

Engro (-2.5%), in its financial statement, announced final cash dividend of Rs2 per share for the year ended December 31, 2020, which was in addition to the interim dividend of Rs24. Its earnings per share came in at Rs43.57.

PSO (-4.1%) in the oil marketing sector reported 1HFY21 earnings per share of Rs19.93 with cash payout of Rs5.

“Moving forward, we recommend investors to buy on weakness in steel and refinery sectors,” the analyst said.

Overall trading volumes dipped to 577.95 million shares compared with Wednesday’s tally of 701.8 million. The value of shares traded during the day was Rs23.2 billion.

Shares of 412 companies were traded. At the end of the day, 140 stocks closed higher, 250 declined and 22 remained unchanged.

Dost Steel was the volume leader with 58.7 million shares, losing Rs0.66 to close at Rs5.94. It was followed by Telecard Limited with 34.3 million shares, gaining Rs0.52 to close at Rs8.28 and K-Electric with 29.3 million shares, losing Rs0.05 to close at Rs4.1.

Foreign institutional investors were net buyers of Rs568.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.