Market watch: Selling in oil sector drags KSE-100 down by over 300 points

Benchmark index drops 0.80% to settle at 40,266.21 points


Our Correspondent November 23, 2017
PHOTO: FILE

KARACHI: The stock market fell on Thursday as uncertainty surrounding the government’s shutdown of furnace oil-based power plants, among other dampeners, took its toll on notable index names in the oil marketing sector.

Rapidly falling international crude oil prices also contributed to the heavy selling of stocks of major oil producers. The acceptance of a medical leave of Finance Minister Ishaq Dar by the prime minister kept investors on the sidelines due to uncertainty about the future of macroeconomic policies.

Throughout the day, the trading was dominated by small and mid-cap names with bearish sentiment prevailing in the KSE-100 Index.

At close, the benchmark KSE 100-share Index registered a decrease of 325.67 points or 0.80% to settle at 40,266.21.

According to Elixir Securities, Pakistan equities closed lower with selling, primarily in index names, dragging the benchmark index down to 40,266 points.

Market watch: Stocks end little changed as profit-taking sets in

“Turnover in the wider market remained below par as volumes were primarily led by small and mid-cap names. Major dent to the KSE-100 index came from Hub Power (-2.8%) and Pakistan State Oil (-3.3%) as both remained on the sellers’ radar due to government's closure of furnace oil-based power plants,” Elixir said.

Engro Corp (-1.9%) also extended the weakness on reported foreign selling after its removal from the MSCI Emerging Markets Index.

Meanwhile, K-Electric (-3.6%) hit the brake and attracted profit-taking after sharp gains a day ago on excitement over the Shanghai Electric Power’s acquisition deal.

“We see no change in interest rates as the central bank will announce monetary policy for two months tomorrow (Friday) while investors will continue to monitor institutional flows and developments on the political front to gauge market direction,” Elixir said.

JS Global analyst Danish Ladhani said the KSE-100 Index succumbed to pressure due to uncertainty on the political front and the rollover week.

“Investors opted for selling on news that Finance Minister Ishaq Dar has been granted indefinite medical leave, causing doubts over the continuity of macroeconomic policies,” the analyst said.

The KSE-100 Index remained positive in the morning, but ultimately shed 326 points to close at 40,266. Traded volumes were down 35% to 102 million shares while the value edged up 1% to $51 million.

K-Electric (-3.6%) was the volume leader with trading in nine million shares.

Pakistan Petroleum (-0.8%), Oil and Gas Development Company (-0.3%) and Pakistan Oilfields (-0.1%) closed in the red zone amidst plummeting international crude prices as the US headed to a long Thanksgiving weekend and markets awaited word from OPEC on a widely expected extension in oil output curbs.

Market watch: Oil and gas companies drive stocks upwards

Mixed sentiment was observed in the banking sector on anticipation of an unchanged policy rate in the upcoming monetary policy. Key stocks such as National Bank (-0.8%), Habib Bank (-0.3%) and United Bank (-0.8%) closed in the red while MCB Bank (+0.4%) and Bank Alfalah (+0.4%) stood in the green zone.

“Moving forward, we recommend investors to remain cautious due to the last day of the rollover week,” Ladhani added.

Overall, trading volumes fell to 101 million shares compared with Wednesday’s tally of 157 million.

Shares of 344 companies were traded. At the end of the day, 119 stocks closed higher, 216 declined while nine remained unchanged. The value of shares traded during the day was Rs5.37 billion.

K-Electric was the volume leader with 9.08 million shares, losing Rs0.21 to close at Rs5.67. It was followed by TPL Trakker with 7.64 million shares, gaining Rs1 to close at Rs8.07 and WorldCall Telecom with 7.48 million shares, losing Rs0.02 to close at Rs3.02.

Foreign institutional investors were net sellers of Rs227 million during the trading session, according to data compiled by the National Clearing Company of Pakistan.

COMMENTS

Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ