Market watch: Index falls to 39,500 as selling continues

Benchmark KSE-100 index decreases 272.12 points

KARACHI: The benchmark-100 index continued to tread down the path of correction, falling another 272.12 points Friday, to end near the 39,500 level.

Stocks continued to see selling pressure with the wider market tracking flows from foreign investors and institutions that dampened the mood just days after the KSE-100 Index broke past the 40,000-point barrier.

At close, the Pakistan Stock Exchange (PSX) benchmark KSE-100 Index ended 272.12 points, or 0.68%, lower to finish at 39,499.08 points.

Elixir Securities, in its report, stated that gains in index heavy Exploration & Production sector were short-lived and the wider market succumbed to selling pressure on reports of foreign selling.



“Early negativity came from Engro Corp (ENGRO PA -4.6%) that tanked on reports of aggressive foreign seller; while cements further dented confidence after Gharibawl Cement (GLWC PA +0%) announced capacity expansion,” said analyst Faisal Bilwani.

“Moreover, investors were anxious after the ECC meeting which allowed concessions to Chinese on CPEC projects, a move that could lead to possible duty-free import of material including steel and cements.

“K-Electric (KEL PA +0.6%) gained after news of Chinese entity considering stake-purchase despite recent denials by KEL’s management, while most volumes were in small and mid-caps that traded volatile,” Bilwani added.

JS Global analyst Nabeel Haroon said that sentiments at the bourse remained negative at large.

“Cement sector led the decline as the sector closed 1.53% lower. Major losers of the aforementioned sector were DGKC (-2.43%) and MLCF (-2.30%),” said Haroon.



“The fertiliser sector saw selling pressure as FFC (-0.98%) and EFERT (-1.36%) declined on the back of news that the ECC has approved sale of imported urea at PKR1,310/bag,” he remarked.

“Despite pressure in the market, POL (+1.54%) and PPL (+0.45%) in the E&P sector managed to close in the green zone on back of surge in international crude oil prices. HBL (-1.16%) led the decline in the banking sector, as the index heavy weight lost value to close in the red zone.

“Moving forward, we advise investors to remain cautious in the upcoming futures’ contract rollover week,” he added.

Trade volumes fell to 218 million shares compared with Thursday’s tally of 239 million shares.

Shares of 375 companies were traded on Friday. At the end of the day, 127 stocks closed higher, 223 declined while 25 remained unchanged. The value of shares traded during the day was Rs11.6 billion.

K-Electric Limited was the volume leader with 53.2 million shares, gaining Rs0.05 to finish at Rs8.72. It was followed by TRG Pakistan Limited with 14.4 million shares, losing Rs0.66 to close at Rs35.79 and Pak Electron with 11.6 million shares, losing Rs0.29 to close at Rs73.83.

Foreign institutional investors were net sellers of Rs791 million during the trade session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, August 20^th, 2016.

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