Market watch: KSE-100 falls, but not as much as sit-in ends

Benchmark KSE-100 index drops 216.24 points to settle at 40,032.17

KARACHI: In line with its usual pattern, the stock market once again began the week on a negative note on Monday, dropping over 300 points in intra-day trading before making some recovery.

However, its performance was better than expectations of many investors as it was widely believed that the benchmark index would tank by a wide margin in the wake of ongoing political instability.

Following the crackdown on participants of the Faizabad sit-in by the government on Saturday, riots and protests broke out in other parts of the country, bringing businesses to a halt.

Reacting to this, as soon as trading began, the KSE-100 Index nosedived and fell below 40,000 points. However, news of successful negotiations prevented the index from dropping further and helped it recover slightly.

At close, the benchmark KSE 100-share Index registered a decrease of 216.24 points or 0.54% to settle at 40,032.17.

Elixir Securities, in its report, stated Pakistan equities extended losses into the new week with the benchmark index finding foothold above the critical 40,000 level.



"Despite the end of the three-week-long sit-in in the morning by the religious groups that reached its peak over the weekend, the market opened lower and remained under pressure throughout the day," stated Elixir.

Notable index names such as Hub Power (-3%), Engro Corp (-2.8%), Oil and Gas Development Company (OGDC, -1.3%) and Habib Bank (HBL, -0.9%) led the losses on reported institutional selling amid shallow depth of the bids on screen.

Turnover on the KSE All-Share Index stood at a paltry $40 million for the entire day while small and mid-caps like K-Electric (+4.2%) and TRG Pakistan (+5%) dominated the volumes chart. The former remained on the buyers' radar over positive news related to its deal with Chinese buyer Shanghai Electric Power.

"(We) expect volatile and choppy trading to continue with institutional flows eventually setting the tone in the wider market," the report added.

JS Global analyst Danish Ladhani said the KSE-100 Index remained under pressure and extended losses, closing down 216 points (0.5%) at 40,032 in the face of concerns over the political environment in the country.

Major laggards were heavyweight Hubco (-2.99%), Engro (-2.76%) and OGDC (-1.25%) which erased 112 points from the index.



The exploration and production sector closed in the red where Pakistan Oilfields (-1.05%), Pakistan Petroleum Limited (-0.88%) and OGDC (-1.25%) were the major laggards as oil prices slipped on prospects of increased output globally. Moreover, mixed sentiments were witnessed in the banking sector as heavyweight United Bank (+1.74%) closed in the green zone whereas HBL (-0.93%) and MCB Bank (-0.68%) stood lower.

"Moving forward, we recommend investors to stay sidelined and wait for clarity due to the prevailing political situation," Ladhani said.

Overall, trading volumes rose to 110.9 million shares compared with Friday's tally of 101 million.

Shares of 348 companies were traded. At the end of the day, 137 stocks closed higher, 187 declined while 24 remained unchanged. The value of shares traded during the day was Rs4.2 billion.

K-Electric was the volume leader with 39.9 million shares, gaining Rs0.25 to close at Rs6.26. It was followed by TRG Pakistan with 12.5 million shares, gaining Rs1.78 to close at Rs37.39 and WorldCall Telecom with 6.7 million shares, losing Rs0.01 to close at Rs3.

Foreign institutional investors were net sellers of Rs7.8 million during the trading session, according to data compiled by the National Clearing Company of Pakistan.