Market watch: Stocks fall as cement, banking, oil sectors come under pressure

Benchmark KSE-100 index drops 151.77 points

KARACHI: The stock market took a breather on Monday as profit-taking kicked in after four straight sessions of gains in the previous week.

Stocks opened mixed and skidded lower during the day as domestic politics kept investors, primarily institutions, at bay, while the CPI inflation reading for April, released near midday, was a non-event with increase of around 4% year-on-year.

At close, the Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index recorded a fall of 0.44% or 151.77 points to end at 34,567.52.

Elixir Securities, in its report, said the declines were led by index-heavy oil stocks as global crude was steady, while financial shares that managed to stay in the black for most of the session also succumbed to late selling and contributed to the losses.



“Index-heavy Oil and Gas Development Company (-1.9%) dented KSE-100 the most (30 points), followed by MCB Bank (-1.5%) (26 points), Pakistan Petroleum Limited (-1.4%) (19 points) and Lucky Cement (-1.2%) (16 points).”

Meanwhile, Hub Power closed 0.2% up on midday news that the company had submitted a letter of intent for setting up an additional 330-megawatt power plant.

“Expect range-bound trading at current levels with investors tracking institutional flows while politics will likely take centre stage in absence of any major triggers,” remarked Elixir Securities analyst Ali Raza.

JS Global analyst Ahmed Saeed Khan said volatility prevailed in first session of the week as the index shed around 152 points.

“The oil and gas sector remained under pressure amid global crude oil prices coming down from their highs over the weekend to trade around $46.80 per barrel.”

Major laggards of the sector were National Refinery Limited (-2.30%), Attock Refinery Limited (-2.07%) and OGDC.



“Profit-taking was witnessed in cement and banking sectors amid increased political noise and uncertainty,” he said.

“Despite gas tariff reduction, the fertiliser sector failed to perform and remained under pressure, with major stocks closing in the red zone. Fauji Fertilizer Bin Qasim Limited (-2.58%) was the top laggard whereas Fatima Fertilizer Company (+0.42%) was the only stock to close positive in the fertiliser sector.”

Trade volumes fell to 185 million shares compared with Friday’s tally of 255 million.

Shares of 356 companies were traded. At the end of the day, 128 stocks closed higher, 216 declined while 12 remained unchanged. The value of shares traded during the day was Rs7 billion.

The Bank of Punjab was the volume leader with 23 million shares, gaining Rs0.09 to finish at Rs9.30. It was followed by TRG Pakistan Limited with 16 million shares, gaining Rs1.12 to close at Rs35.59 and Sui Northern Gas Pipelines Limited with 14 million shares, gaining Rs0.34 to close at Rs33.78.

Foreign institutional investors were net buyers of Rs434 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, May 3^rd, 2016.

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