Market watch: Index closes below 31,500 as bank, cement sectors take beating

Benchmark KSE-100 index falls 356.38 points.

KARACHI: The benchmark-100 index bore the brunt of a bearish global market, made worse by persistent foreign selling, and closed below 31,500 to cap off a bleeding week.

A stronger yen pulled down the auto sector, while growing speculation of a discount-rate cut weighed in on the financial stocks as the index lost over 1%.



At close on Friday, the Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index fell 1.12% or 356.38 points to end at 31,464.16.

Elixir Securities analyst Ali Raza said Pakistan equities extended losses for the fourth day in a row. “Dull activity was witnessed in the market with participants staying cautious and on the sidelines fearing more foreign selling amid weakening regional markets,” said Raza. “Financials continued to dent the KSE-100 index with MCB bank (-3.53%), United Bank Limited (UBL, -0.31%) and National Bank of Pakistan (NBP, -2.32%) alone contributing nearly one third of the points to index declines.

“Though other major sectors such as automobiles, cements and fertilisers closed in red, index heavy exploration and production (E&P) did relatively well today, helped by recovery in international crude and on reports of foreign buying in Pakistan Oilfields (POL, +3.94%).”

Meanwhile, JS Global analyst Ahmed Saeed Khan reported prevalence of volatility.

“Seasonal dip in the prices of cement by Rs5 per bag in the north translated into pressure on the sector with major laggards being Luck (-2.22%) and Cherat (CHCC, -4.15%).

“Profit taking continued in the banking sector as concerns over further rate cuts brought selling pressure.

“Strength in the Japanese yen kept the auto sector under pressure as Pak Suzuki (PSMC, -5%) and Indus Motors (INDU, -3.82%) closed weaker.



“A bounce back in global oil prices initiated a rally in POL as it gained 3.94%.

“Continuation of the negative trend as corporate results which were just in line with expectation has failed to excite the bulls.”

Trade volumes rose to 122 million shares compared with Thursday’s tally of 113 million shares.

Shares of 337 companies were traded on Friday. At the end of the day, 75 stocks closed higher, 239 declined while 23 remained unchanged. The value of shares traded during the day was Rs7.1 billion.

Fauji Cement was the volume leader with 8.0 million shares, losing Rs0.85 to finish at Rs38.50. It was followed by Jahangir Siddiqui & Co. with 7.8 million shares, gaining Rs0.62 to close at Rs21.25 and TRG Pakistan with 6.8 million shares, losing Rs0.79 to close at Rs26.44.

Foreign institutional investors were net buyers of Rs10 million during the trade session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, February 13^th,  2016.

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