Market watch: Trading turns sour following Iran-Saudi Arabia tussle

Benchmark KSE-100 index falls 219.82 points

KARACHI: The stock market shed on Monday nearly half of New Year trading session’s gains as discouraging news from the international arena dealt a heavy blow, despite steady gains in international crude prices. Escalating tensions between Iran and Saudi Arabia dampened the mood.



Foreign investors pulled out a massive $4.4 million, selling a disproportionate 2.5 times what was bought.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.66% or 219.82 points to end at 33,009.13.

According to JS Global analyst Arhum Ghous, the KSE-100 index opened on a positive note but soon came under pressure as regional markets tanked on the back of disappointing Chinese manufacturing data and boiling tensions between Iran and Saudi Arabia.

Profit-taking was seen in the cement sector as DG Khan (-1.71%), Fauji Cement (-1.78%) and Lucky Cement (-2.17%) closed in the red zone.

Pak Elektron (PAEL +4.43%) closed near its upper circuit breaker as the company announced 25% right shares at a premium of Rs30 per share, which came in line with market expectation. Investors came in droves to buy PAEL shares, as the company disclosed that the reason for the right issue was to reduce its financial cost, which should mean well for profitability going forward.

Meanwhile, Elixir Securities in its report stated that equities lost half of the Friday gains to start the week on a negative note as investors tracked lower regional markets.



Renewed concerns over China’s economic slowdown and escalation of tensions in the region were a primary cause for concern.

The local market opened positive led by index-heavy oil shares that tracked a near 3% recovery in international crude prices, but the KSE-100 index soon entered the red zone.

Limited institutional activity was witnessed as only $50 million worth of shares changed hands on the benchmark index. Major investors await clarity on foreign flows post-holidays.

Trade volumes fell to 110 million shares compared with Friday’s tally of 124 million shares.

Shares of 325 companies were traded. At the end of the day, 88 stocks closed higher, 224 declined while 13 remained unchanged. The value of shares traded during the day was Rs6.3 billion.

Pak Elektron was the volume leader with 15.4 million shares losing Rs2.82 to finish at Rs66.42. It was followed by Dewan Cement with 8.6 million shares gaining Rs0.12 to close at Rs13.98 and TRG Pakistan with 7.6 million shares gaining Rs0.07 to close at Rs35.23.

Foreign institutional investors were net sellers of Rs453 million worth of shares during the trade session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, January 5^th, 2016.

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