Market watch: Bourse falls as political uncertainty, MSCI review take their toll

Benchmark KSE-100 index loses 280.99 points to settle at 40,662.79

KARACHI: The stock market got no respite from the bear-run for the fourth straight session on Wednesday as investors continued to stand on the sidelines.

Apart from political and economic uncertainty, the downgrade of Engro Corporation by the MSCI in its biannual review also dented sentiments. The KSE-100 index started falling from the word go and dropped over 338 points before recovering slightly.

At close, the benchmark KSE 100-share Index registered a decrease of 280.99 points or 0.69% to settle at 40,662.79.

Elixir Securities, in its report, stated Pakistan equities closed fourth consecutive session lower with the benchmark index settling above 40,600 points.

The market opened lower as Engro Corp (-2.7%) dented the index in early trade. The stock recorded volumes of around nine million shares and traded at levels last seen 13 months ago.

Apart from Engro, the KSE-100 index was hit mainly by stocks across oil and financial sectors. These included Habib Bank (HBL, -2.3%), Oil and Gas Development Company (OGDC, -2.4%), MCB Bank (-2.4%), Pakistan Petroleum (PPL, -1.6%) and Pakistan Oilfields (POL, -1.4%).



Investor participation in the wider market was dismal and only about 90 million shares changed hands on the KSE All-share Index, down 28%.

While oil stocks tracked overnight fall in international crude prices, Mari Petroleum (+3.1%) stood out following news of a hydrocarbon discovery, which was announced on Tuesday.

"(We) expect a range-bound market with the KSE-100 index likely finding support near current levels. Participants, on the other hand, will continue to look towards institutional flows to gauge market direction in the absence of near-term triggers," the report added.

JS Global analyst Maaz Mulla said bears dominated the bourse for most of the day largely because of political uncertainty as the KSE-100 index shed 281 points to close at 40,663.

The exploration and production sector continued to march on the downward path as international crude prices edged lower after the International Energy Agency cast doubt about talk over the past few months of tightening fuel markets.

POL (-1.43%), PPL (-1.62%) and OGDC (-2.42%) lost value to close in the red zone. Pakistan State Oil fell 0.70% in the wake of news that the company's receivables swelled to Rs307 billion.

Some positivity was seen in the textile sector as restrictions may be withdrawn on the import of cotton from December 1. Nishat Mills in the sector rose 0.16%.



"Moving forward, we recommend investors to remain cautious," Mulla said.

Overall, trading volumes fell to 90 million shares compared with Tuesday's tally of 140 million.

Shares of 367 companies were traded. At the end of the day, 145 stocks closed higher, 201 declined while 21 remained unchanged. The value of shares traded during the day was Rs6.8 billion.

Engro Corporation was the volume leader with 8.98 million shares, losing Rs7.40 to close at Rs265.77. It was followed by Azgard Nine with 7.01 million shares, losing Rs0.24 to close at Rs14.82 and Unity Foods (R) with 3.86 million shares, losing Rs0.13 to close at Rs4.80.

Foreign institutional investors were net sellers of Rs530.8 million during the trading session, according to data compiled by the National Clearing Company of Pakistan.