KARACHI: The stock market extended its losses on Monday as it continued to fall for the fourth consecutive session.
After a positive open, the KSE 100-share Index advanced almost 215 points to hit an intra-day high of 47,083 points. However, the positivity did not last long as institutional profit-taking pushed the index down by over 540 points. Later, it made some recovery, but still closed in the negative.
At the end of trading, the benchmark KSE 100-share Index recorded a fall of 265.22 points or 0.57% to close at 46,593.34.
Elixir Securities, in its report, stated that Pakistan equities dropped further heading into the new week and the benchmark index slipped by as much as 0.6% and settled near 46,600 points.
“The market opened and traded in the positive territory for a brief period and then drifted lower on thin activity, sinking by over 540 points or 1.2% intra-day. Domestic politics as the PM faced investigations along with latest foreign outflows were to blame as they dashed any hopes of recovery on weekend news of revival of the leverage product by the regulator,” stated the report.
Major sectors including fertiliser, cement and financial closed lower on reported institutional selling and no major buying interest from retail and high net-worth individuals (HNWIs).
Oil stocks, however, garnered interest in late trading and helped the market pare losses as investors tracked a surge in global crude prices.
“[We] expect volatile trading to continue with flows in index names remaining the key to any possible recovery in the near term,” the report added.
JS Global analyst Arhum Ghous said the market opened on a positive note after the Securities and Exchange Commission of Pakistan (SECP) allowed brokers to fund share purchase, but the positivity could not sustain as the KSE-100 index closed in the red.
A volatile trend was witnessed in the market as the index traded between an intra-day high of +225 points and an intra-day low of -546 points.
“Lucky Cement (-1.12%) and Siddiqsons Tin Plate Limited (-4.50%) shed value as the State Bank of Pakistan advised the federal government to make it mandatory for project developers to arrange financing from abroad at least equivalent to the current foreign component of the project cost, which is expected to affect coal-fired projects of these companies,” said Ghous.
Nishat Mills (+3.22%) from the textile sector gained on the back of announcement of its participation in the Select USA investment summit, said the analyst.
The exploration and production sector gained because investors found current valuations attractive. Oil and Gas Development Company (+1.63%), Pakistan Petroleum (+0.61%) and Pakistan Oilfields (+2.40%) closed in the green in the above sector.
Commercial banks showed mixed sentiments as United Bank (+0.57%) and MCB Bank (+1.70%) closed in the green zone while Habib Bank (-1.09%) and National Bank (-2.85%) closed lower.
“We recommend investors to hold long-term positions and reduce short-term positions on strength,” he added.
Overall, trading volumes rose to 170 million shares compared with Friday’s tally of 129 million.
Shares of 360 companies were traded. At the end of the day, 110 stocks closed higher and 216 declined while 34 remained unchanged. The value of shares traded during the day was Rs9.1 billion.
WorldCall Telecom was the volume leader with 15.4 million shares, gaining Rs0.16 to close at Rs3.71. It was followed by K-Electric with 10.8 million shares, losing Rs0.13 to close at Rs6.92 and TRG Pakistan with 10.7 million shares, gaining Rs2.09 to close at Rs46.68.
Foreign institutional investors were net sellers of Rs460 million during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.