Market watch: In downward spiral, KSE-100 touches 10-month low

Benchmark index falls 2.15% to close at 42,153.38

KARACHI: It has become an everyday occurrence now for the bearish trend to dominate the Pakistan Stock Exchange.

The stock market ended its third consecutive session in the red zone on Monday as political uncertainty and cement stocks once again dragged the index down.

The KSE-100 index plunged 1,062 points to hit an intra-day low of 42,016.87 - an all-time low for this year. It made a slight recovery later, but the market still ended the session in negative. The index has receded 20% so far since hitting the all-time high at 52,876 points on May 24, 2017.

At close, the benchmark KSE 100-share Index recorded a decrease of 925 points or 2.15% at 42,153.38.

According to Elixir Securities, Pakistan equities tumbled yet again with the benchmark index falling to a 10-month low and settling above 42,100.

"The market traded sideways in early trade as investors waited with bated breath for flows from institutions to set direction. Cement stocks later led the decline as the news of a cut in cement prices not only impacted the sector negatively, but also dented market sentiments," stated Elixir.



Institutional selling in other major sectors amid no aggressive bids accelerated the drop in the KSE-100 index.

Among laggards, Lucky Cement (-5%) dented the index the most followed by Sui Northern Gas Pipelines (-5%), Pakistan State Oil (-4.4%), DG Khan Cement (-5%) and Dawood Hercules (-5%).

Among leaders, United Bank (+1.5%), Pakistan Petroleum (+1.7%) and Pakistan Oilfields (+2.2%) contributed most positive points to the index.

"We expect a bounce back in the coming days as oversold index names look ripe for cherry-picking in our view," the report added.

JS Global analyst Maaz Mulla said the KSE-100 index splashed red ink everywhere in Monday's trading session as it hit an intra-day low of 1,062 points.

"This selling pressure was on the back of investor scepticism about the political scenario in the country," said Mulla.

The cement sector led the decline where Lucky Cement (-5%), DG Khan Cement (-5%), Pioneer Cement (-5%) and Cherat Cement (-5%) closed at their respective lower circuits on the news of a price cut of Rs25 per bag in the northern region.

Stocks of steel companies also fell and International Steels (-4.7%), International Industries (-5%) and Aisha Steel Mills (-5%) dipped the most. However, Pakistan Oilfields (+2.2%) and Pakistan Petroleum (+1.7%) gained to close in the green zone despite lower oil prices in the global economy.



"The market is expected to remain volatile due to political uncertainty where we recommend investors to stay cautious and refrain from taking short-term positions," Mulla added.

Overall, trading volumes fell to 153 million shares compared with Friday's tally of 188 million.

Shares of 384 companies were traded. At the end of the day, 40 stocks closed higher, 334 declined while 10 remained unchanged. The value of shares traded during the day was Rs7.8 billion.

Azgard Nine was the volume leader with 15.1 million shares, losing Rs0.22 to close at Rs16.04. It was followed by The Bank of Punjab with 11.4 million shares, losing Rs0.59 to close at Rs9.73 and TRG Pakistan with 8.7 million shares, losing Rs2.11 to close at Rs40.77.

Foreign institutional investors were net sellers of Rs46 million during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.