Market watch: Bearish sentiment leads to 5th successive decline

Benchmark KSE-100 index falls 147.65 points

KARACHI: After a 1.26% increase on New Year’s, the benchmark-100 index has undergone a troubling ride, ending negative for the fifth successive time on Friday to close near the 32,500 level.

After recovering almost all of the previous week, stocks tumbled from Monday to Friday as all sectors saw a bearish sentiment.

Financials led the decline with oil and exploration sector not far behind. Cements saw profit-booking as the turmoil in global markets as well as declining crude prices took its toll.

At close on Friday, the Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.45% or 147.65 points to end at 32,534.85.



Elixir Securities, in its report, said activity in the broader market was quite dull as investors stayed on the side-lines ahead of the weekend.

“Financials led the declines followed by E&Ps and cements on reported foreign selling,” stated the report. “Index-heavy Habib Bank (HBL, -1.40%), MCB Bank (-1.25%), Pakistan Oilfields (POL, -3.05%) and Oil and Gas Development (OGDC, -0.86%) cumulatively contributed more than half the points that led to index decline.

“Meanwhile, pharmas succumbed to profit-taking after posting strong gains in the last two trading sessions.

“We expect market to trade range-bound at current levels with investors closely tracking the region, foreign flows and on-going broker inquiry, and as such we expect launch of Pakistan Stock Exchange, due Monday, to likely be a non-event.”



Meanwhile, JS Global analyst Ovais Ahsan said the market lost ground as panic over turmoil in global markets, consistent selling by foreign investors and the breakneck descent of oil remained an anathema for the bulls.

“The banking and oil sectors led the decline as major index movers were HBL (-1.47%), MCB (-1.54%), POL (-3.09%) and OGDC (-0.86%).

“The cement sector which saw a good run up earlier in the week succumbed to profit taking as Lucky (-0.87%) and DG Khan (-1.49%) saw selling pressure.

“Local institutions came in to book profits as fear of further weakness in international markets compelled them to stay defensive. Other factors affecting sentiment negatively included India warning Pakistan of calling off talks in the wake of the recent terrorist attacks on its air force base.”

Trade volumes fell to 111 million shares compared with Thursday’s tally of 136 million shares.

Shares of 341 companies were traded on Friday. At the end of the day, 110 stocks closed higher, 208 declined while 23 remained unchanged. The value of shares traded during the day was Rs7.2 billion.

Pak Int. Bulk Terminal was the volume leader with 9.6 million shares, gaining Rs0.89 to finish at Rs29.37. It was followed by Jahangir Siddiqui and Company with 7.0 million shares, gaining Rs0.50 to close at Rs21.12 and Southern Electric with 6.9 million shares, losing Rs0.09 to close at Rs2.42.

Foreign institutional investors were net sellers of Rs138 million during the trade session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, January 9^th, 2016.

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