Market watch: KSE-100 hits 17-month low with over 500-point fall

Benchmark index loses 1.53% to settle at 38,481.70 points

KARACHI: The stock market failed to sustain its positive run from the previous session as politics continued to dominate sentiments, pushing the bourse deep into the red on Monday.

The KSE-100 Index opened on a positive note and remained on a steady ascent. However, after first hour, the trend changed and the benchmark index hit an intra-day low of 1,062 points. It staged a brief recovery before close.

At the end of trading, the benchmark KSE 100-share Index registered a decrease of 598.30 points or 1.53% to settle at 38,481.70.

Elixir Securities analyst Ali Raza said Pakistan equities erased all of Friday's gains and touched a 17-month low.

The market opened positive and early trading saw the KSE-100 Index shoot up by over 350 points, helped primarily by gains in exploration and production stocks.

"However, as the day progressed, institutional selling dragged the index down where notable names across cement, fertiliser and banking sectors bore the brunt and pulled the KSE-100 Index in the negative zone below 38,500," Raza added.



Interestingly, Hub Power (-1.1%) and Nishat Mills (no price change), which should have benefited from rupee depreciation, failed to trade higher, though the currency sank further by another 1% against the greenback in the interbank market on Monday. The rupee closed at 108.4 to a dollar.

In a press statement, the central bank expressed its willingness to let the rupee find its direction through demand and supply, which alleviated volatility in the market and was likely to remain the key focus in the days to come.

"Given that Monday's settlement figures do not show major selling by foreigners or domestic asset managers, we see support near current levels tomorrow (Tuesday)," he added.

JS Global analyst Maaz Mulla said the stock exchange extended the decline with the benchmark index breaking below 39,000 to settle at 38,482 (-598 points).

"The market kicked off trading in the positive zone for a brief period, hitting an intra-day high of +357 points, but it soon tumbled to touch the intra-day low at -705 points over political and rupee-dollar uncertainty," Mulla said.



More than 60 stocks in all sectors closed at their lower circuits. The cement sector recorded a sharp decline with Maple Leaf Cement (-3.79%), DG Khan Cement (-3.73%) and Lucky Cement (-3.96%) amongst major laggards.

Limited institutional interest was seen in key sectors such as banks where Habib Bank (-1.03%), United Bank (-0.11%) and MCB Bank (-1.63%) fell.

Refineries led the decline over news that the oil industry had raised the red flag over imminent closure of the refineries. Attock Refinery (-5%), National Refinery (-4.62%) and Pakistan Refinery (-5%) closed at or near their lower circuits.

Bullish sentiments were seen in the exploration and production sector where Pakistan Petroleum (+2.21%), Pakistan Oilfields (+0.96%) and Oil and Gas Development Company (+2.71%) stood positive.



"Moving forward, we recommend investors to stay cautious and avoid taking long-term positions unless there is clarity on politics and economy," he added.

Overall, trading volumes fell to 129 million shares compared with Friday's tally of 149 million.

Shares of 367 companies were traded. At the end of the day, 45 stocks closed higher, 308 declined while 14 remained unchanged. The value of shares traded during the day was Rs5.9 billion.

WorldCall Telecom was the volume leader with 18.5 million shares, losing Rs0.15 to close at Rs2.98. It was followed by TRG Pakistan with 8.3 million shares, losing Rs1.69 to close at Rs32.14 and K-Electric with 5.9 million shares, losing Rs0.15 to close at Rs6.03.

Foreign institutional investors were net buyers of Rs63.8 million during the trading session, according to data compiled by the National Clearing Company of Pakistan.