(MENAFN- The Peninsula) Qatari stocks plunged on heavy profit-taking yesterday, a day after Federal Reserve announced its decision to wound up its over five-year-long quantitative easing stimulus programme.
The net sellers were foreign investors. As the retail investors joined the sell-off wave, the local bourse's benchmark index tumbled by 2.01 percent to finish at 13,498 points.
Barring two stocks, the entire banking stocks entered red with QIB and Doha Bank losing the most. QIB sank 3.36 percent as Doha Bank crashed by 3.01 percent. As a whole, the sectoral index fell by 1.89 percent.
Behemoth Industries Qatar (IQ) and the utility Electricity and Water were the main drags on the Industrial sector. The sectoral index tanked by 2.39 percent as the IQ tumbled 3.38 percent and the Electricity and Water shed 2.31 percent.
Analysts noted that the market failed to respond positively to the regulator's announcement to put in place a series of laws, including allowing margin trading on the Qatari bourse, yesterday.
It was the sell-off by foreign frontier funds that sparked heavy profit-taking in Qatar on Thursday, Reuters reported. A number of companies from the UAE and Qatar remain part of MSCI's Frontier 100 benchmark even though the index compiler upgraded both countries to emerging market status in May.
"MSCI's opted to gradually phase those stocks out of the frontier index through monthly weighting reductions and one of these takes effect on Nov.1. This prompted a wave of selling by passive funds tracking the index on the final trading day before this milestone", the report said.
Monthly data issued by QE yesterday noted the benchmark index lost 229.45 percent or 1.67 percent during the month of October. Telecom and Real Estate sectors were the worst performing sectoral indices of the month.
In October, the total traded value decreased by 23.03 percent compared to the previous month. Total volume decreased by 28.18 percent.
Market capitalisation fell by 1.6 percent at the end of October to QR728bn. Ezdan Holding Group, QNB, Masraf Al Rayan, Industries Qatar and UDC were the top gainers of the month.
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