Market watch: Stocks break positive streak, succumb to selling pressure

Benchmark KSE 100-share index falls 307.12 points

KARACHI: Pakistan equities started the week lower on Monday as profit-taking, mainly in financial stocks, pulled the benchmark KSE 100-share index below 38,500 points.

At close, the Pakistan Stock Exchange’s benchmark index recorded a fall of 0.79% or 307.12 points to end at 38,469.82.

Elixir Securities, in its report, said activity remained relatively lower compared to last week’s average with $85 million worth of shares exchanging hands on the KSE-100 index, down 25%.



“Stocks were higher in early trade on gains in index-heavy exploration and production (E&P) sector that tracked overnight recovery in global crude. Pakistan Petroleum Limited (PPL) gained 1.8%, Oil and Gas Development Company (OGDC) 0.6% and Pakistan Oilfields Limited (POL) 1.1%.”

Moreover, Millat Tractors (+4.5%) and Al-Ghazi Tractors (+5%), the only two listed tractor manufacturers, hit their upper price limits as investors cheered news of reduction in sales tax.

“The benchmark index that gained 0.5% in the morning could not sustain the highs and nosedived into negative territory with financial stocks leading the decline on reported institutional selling,” said the report.

Index-heavy MCB Bank (-4%) hit the lower price limit intra-day and along with Habib Bank Limited (-3.3%) and United Bank Limited (-3%) cumulatively erased 245 points off the KSE-100 index on profit-taking.

“The volatile market will likely continue as financial and oil stocks are expected to guide the direction in the days ahead while the MSCI-driven rally may regain the momentum closer to Eid Holidays or June year-end,” commented Elixir Securities analyst Ali Raza.

Meanwhile, JS Global analyst Arhum Ghous said profit-taking was recorded in the banking shares that were proposed to be part of the MSCI Emerging Market Index. HBL, MCB and UBL lost value and closed in the red zone.

“Investor interest was seen in the refinery sector on the back of a news report indicating that the government will incentivise local refineries that have completed their dehydration plants by allowing them collection of 9% deemed duty.”



Attock Refinery Limited (+4.21%) was the major gainer in the sector, as the company was in a position to commission its dehydration plant anytime soon.

OGDC, POL and PPL gained in the E&P sector, as there was a slight recovery in crude oil prices, said Ghous.

“Moving forward, we remain bullish on the market and recommend investors to see any dip such as the one on Monday as an opportunity to buy,” he added.

Trade volumes rose to 149 million shares compared with Friday’s tally of 135 million.

Shares of 327 companies were traded. At the end of the day, 123 stocks closed higher, 184 declined while 20 remained unchanged. The value of shares traded during the day was Rs9.9 billion.

Pak Elektron Limited was the volume leader with 19.2 million shares, gaining Rs3.03 to finish at Rs67.83. It was followed by K-Electric with 14.3 million shares, losing Rs0.03 to close at Rs8.03 and Pakistan International Bulk Terminal with 12.2 million shares, losing Rs0.49 to close at Rs32.61.

Foreign institutional investors were net sellers of Rs401 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, June 21^st, 2016.

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