Market watch: Political climate pulls KSE-100 down by over 600 points

Benchmark index falls 1.24% to end at 48,689.42 points

KARACHI: Stocks continued to decline for the third straight session on Tuesday as increasing political tensions pushed the benchmark index down by almost 636 points before a slight recovery.

Market analysts suggested that growing panic over the Dawn news leak was the reason behind the market's decline.

At close, the Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index recorded a fall of 611.48 points, or 1.24%, to end at 48,689.42.

According to Elixir Securities, Pakistan equities, while entering the new month, recorded their third straight day of declines and the KSE-100 index settled down 1.2% near 48,700 on across-the-board profit-taking.



"After a weak start, the market staged a partial recovery in early trading, however, the index couldn't extend its advance past Friday's close as sellers dominated the proceedings likely on anxiety over domestic politics and foreign outflow, despite the MSCI upgrade due later in the month," said analyst Ali Raza.

"Pharmas (-3.75%) were the worst performers where Searle Pakistan (-4.9%) dented the KSE-100 index by most points, while utilities were next in line where Hub Power (-1.3%) and Sui Northern Gas Pipelines (-2.6%) led the losses," said Raza.

Other key sectors including cement, fertiliser and oil also finished lower amid reports of local institutional selling.

"The highlight of today was Pakistan International Bulk Terminal (+5%) as it not only contributed the most to the day's gains, but also led the volumes chart as speculators bet on unconfirmed news related to the commencement of its operations," said the analyst.



"We expect the market to recover lost ground and volumes in index names may pick up in the days ahead as investor's attention shifts to the MSCI upgrade," he added.

JS Global analyst Arhum Ghous said bloodbath-type activity was witnessed in the market as the index lost around 611 points to close at 48,689. The pressure came on the back of investor scepticism about political scenario in the country.

"The banking sector led the decline as it lost value to close (-0.7%) lower from the previous trading session. MCB Bank (-1.90%), UBL (-1.01%) and ABL (-1.70%) lost value which weighed on the index," said Ghous.

On the other hand, the Consumer Price Index (CPI) numbers showed an increase of 4.78% for April 2017 versus 4.94% recorded in the previous month.



In the exploration and production sector, OGDC (-1.06%) and Pakistan Oilfields (-1.06%) lost value to close in the red zone as crude oil prices slid to consolidate around $51.91 per barrel.

"The fertiliser sector closed in the red zone on the back of news that the ECC had approved a reduction in imported urea prices to Rs1,000 per 50kg bag. Engro Fertilizers (-1.60%), Fauji Fertilizer Company (-1.48%) and Fauji Fertilizer Bin Qasim (-1.49%) were major laggards of the sector," the analyst remarked.

Adamjee Insurance (-0.73%) failed to garner investor interest in the bearish market in spite of posting a robust growth in its underwriting result for 1Q2017. The insurance company declared earnings per share of Rs1.95.

"We expect the market to remain volatile and recommend investors to accumulate value stocks at current levels," he added.



Overall, trading volumes fell to 199 million shares compared with Friday's tally of 289 million.

Shares of 378 companies were traded. At the end of the day, 84 stocks closed higher and 280 declined while 14 remained unchanged. The value of shares traded during the day was Rs10.7 billion.

Pakistan International Bulk Terminal was the volume leader with 17.3 million shares, gaining Rs1.39 to close at Rs30.41. It was followed by Aisha Steel Mills with 13 million shares, losing Rs0.36 to close at Rs25.04 and Pak Elektron with 12.4 million shares, losing Rs5.76 to close at Rs109.60.