KARACHI: The KSE-100 took another battering on Wednesday – its fifth successive finish in the red – as stocks slated for inclusion in the MSCI Pakistan Index underwent massive selling pressure.
At close, the Pakistan Stock Exchange’s (PSX) benchmark 100-share index finished with a fall of 861.59 points or 1.67% to close at 50,591.57.
According to a report by Elixir Securities, equities closed the last day being classified as MSCI Frontier with a record flow exchanging hands given transition to MSCI Emerging Market.
“A great step ahead for Pakistan capital markets was, however, greeted with the red as benchmark KSE-100 Index tanked 1.7% primarily on profit-taking in Emerging Market stocks,” said analyst Ali Raza.
“Against expectation of a few market players, most FII transition flows went through off-market (NDM) with $273 million worth exchanging hands while possibly residuals flooding the system as $508 million traded on PSX, highest since mid of 2008.
“Reported institutional selling in late trading period triggered local sell-off with investors off-loading both in regular and post-close session,” he added.
Meanwhile, JS Research analyst Arhum Ghous said that major selling appeared in the market due to MSCI EM rebalancing flows.
“The banking sector continued its previous day trend where big banks such as MCB Bank (-4.83%), United Bank (-4.76%) and Habib Bank (-4.75%) lost value to close in the red zone,” he said.
“The exploration and production sector lost value to close in the red zone as oil prices fell by 1% as rising production have led to concerns on OPEC-led output deal.
“Oil and Gas Development Company (-4.35%) and Pakistan Petroleum (-4.27%) were the major laggards of the mentioned sector. Selling pressure was seen in the cement sector where sector heavy weights Lucky Cement (-4.70%) and Maple Leaf Cement (-3.14%) closed in the red trajectory. Moving forward, we recommend investor to stay cautious at current levels,” he added.
Overall, trading volumes rose to 410 million shares compared with Tuesday’s tally of 234 million.
Shares of 382 companies were traded. At the end of the day, 109 stocks closed higher and 248 declined while 25 remained unchanged. The value of shares traded during the day was Rs53.34 billion.
Oil and Gas Development Company was the volume leader with 26.98 million shares, losing Rs8.05 to close at Rs176.83. It was followed by Engro with 23.42 million shares, losing Rs17.51 to close at Rs372.08 and K-Electric with 21.46 million shares, losing Rs0.38 to close at Rs7.32.
Foreign institutional investors were net sellers of Rs8.58 billion during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.