Market watch: Stocks close lower for third consecutive session

Benchmark KSE 100-share Index falls 214.57 points

KARACHI: Pakistan equities closed lower on Tuesday after trading volatile as the benchmark KSE 100-share Index traded in a wide range of near 800 points.

At close, the Pakistan Stock Exchange’s (PSX) benchmark index recorded a fall of 0.44%, or 214.57 points, to end the day’s trading at 48,757.67.

According to a report of Elixir Securities, the wider market carried Monday’s negative trend and opened gap down while lower regional markets also had an impact on sentiments in early trade that resulted in the KSE-100 index testing support above 48,300 points.



“Although the market quickly recovered thereafter to enter the green zone, general negativity and reported institutional selling in index names across cement, pharma, financial, E&P and select stocks kept the KSE-100 index under pressure,” said analyst Faisal Bilwani.

“Investors generally preferred safe havens/yield plays in a bid to prepare their portfolios for withstanding volatility in the near term,” he said.

Notably, Oil and Gas Development Company (+1.9%) maintained its winning streak for the second day as the government stepped back from its earlier decision of divesting a 5% stake.

It was followed by Hub Power (+1.3%) that contributed the second highest gains for the day to the KSE-100 index after recording volumes of over 5 million shares, being the most in the last three weeks, said Bilwani.



“The decline was led by Lucky Cement (-2%), Searle (-4%), Habib Bank (-1.1%), MCB Bank (-1.4%) and Mari Petroleum (-3.1%) - all closing lower on reported institutional selling,” he said.

“Expect volatility to prevail in the near term with the KSE-100 index hovering in a range of 300-600 points near 49,000. Flows in index names will continue to provide direction to the market while ongoing results season will keep investors interest intact.”

Meanwhile, JS Global analyst Nabeel Haroon said the market opened on a negative note as the index dived to an intra-day low of -623 points during initial hours of trading on the back of aggressive selling by investors.



“The selling was led by the fear of strict action by the SECP on compliance issues. Some recovery was later witnessed in the market as the index gained to make an intra-day high of +171 points. However, the recovery was short-lived as the market again lost ground to close 215 points lower at 48,758,” said Haroon.

Fauji Foods (FFL, +1.78%) gained on the back of information disseminated in the market in which the company announced that its UHT process machine and ancillary equipment had commenced operation following successful completion of its balancing, modernisation and replacement (BMR).

FFC (+0.79%) gained as the fertiliser company announced its year-end result for 2016. It posted a full-year EPS of Rs9.26 per share, which was in line with market expectation. The result was accompanied by a final dividend of Rs2.75 per share, taking the full-year pay-out to Rs7.90 per share, said the analyst.



“Today's major index-movers were LUCK (-2%), HBL (-1.05%) and MCB (-1.39%). Moving forward, we recommend investors to stay cautious at current levels as investors might offload their leverage positions,” he added.

Trading volumes fell to 316 million shares compared with Monday’s tally of 389 million.

Shares of 409 companies were traded. At the end of the day, 139 stocks closed higher, 260 declined while 10 remained unchanged. The value of shares traded during the day was Rs19.3 billion.

K-Electric Limited was the volume leader with 32.9 million shares, gaining Rs0.15 to finish at Rs10.40. It was followed by TRG Pakistan Limited with 24 million shares, losing Rs0.37 to close at Rs54.10 and Japan Power with 19.5 million shares, losing Rs1 to close at Rs6.34.

Foreign institutional investors were net sellers of Rs699 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.