KARACHI: Despite an uptick in trading activity, the stock market closed in the red again on Tuesday as the oil and gas exploration and production sector - the main lifeline over the past few weeks - shed value due to weakening global crude prices.
Removal of notable names from MSCI indices also sparked negative sentiments as Engro was shifted from the MSCI Pakistan Index to the small-cap index.
At close, the benchmark KSE 100-share Index registered a decrease of 296.11 points or 0.72% to settle at 40,943.78.
JS Global analyst Maaz Mulla said another dull session was recorded at the Pakistan bourse as the benchmark KSE-100 index traded between an intra-day high of +77 points and intra-day low of -340 points. It closed at 40,944, down 296 points.
Market watch: Stocks end lower as volumes hit the lowest since May 2015
Volumes stood at 140 million shares compared to 87 million shares the previous day. In the MSCI semi-annual review, Engro was removed from the MSCI Pakistan Index and added to the small-cap index while Ferozsons Laboratories, Pak Suzuki Motor Company and Shell were removed from the small-cap index.
These stocks received a battering as Engro (-5%) hit its lower circuit whereas Shell (-1.79%), Pak Suzuki Motor Company (-2.44%) and Ferozsons (-1.37%) closed in the red zone.
Fauji Fertilizer Bin Qasim (+2.05%) closed positive following news of increase in di-ammonium phosphate prices by Rs50 to Rs2,670 per bag.
The oil and gas exploration and production sector continued to be on its downward path as crude prices edged lower in the global market. Pakistan Oilfields lost 1.14%, Oil and Gas Development Company fell 2.16% and Pakistan Petroleum lost 1.29%.
"Moving forward, we recommend investors to stay cautious at current levels where any upside can be considered as an opportunity to reduce short-term positions or book profits," he added.
According to Topline Securities, trading at the bourse was guided by the MSCI's overnight announcement where the leading index provider removed Engro Corporation from the Emerging Markets Index.
"Resultantly, Engro crashed 5% with only 0.66 million shares changing hands. On the flipside, some respite was noted on the external front in the wake of cabinet's permission to borrow $3 billion from international debt markets," Topline said.
Weekly review: KSE-100 ends positive, but uncertainty remains
Trading activity improved as volumes rose 60% while value went up 57%. Channel checks suggested that domestic DAP prices were increasing in line with the rising international prices. Local producer Fauji Fertilizer Bin Qasim increased prices by Rs50 per bag whereas importers raised rates by Rs50 to Rs200 per bag, the report added.
Overall, trading volumes rose to 140 million shares compared with Monday's tally of 87 million.
Shares of 373 companies were traded. At the end of the day, 139 stocks closed higher, 207 declined while 27 remained unchanged. The value of shares traded during the day was Rs5.84 billion.
Azgard Nine was the volume leader with 18.5 million shares, gaining Rs0.70 to close at Rs15.06. It was followed by Unity Foods with 14.4 million shares, gaining Rs0.63 to close at Rs4.93 and TRG Pakistan with 8.87 million shares, gaining Rs0.64 to close at Rs35.14.
Foreign institutional investors were net buyers of Rs440.8 million during the trading session, according to data compiled by the National Clearing Company of Pakistan.
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