Market watch: Political noise drags KSE-100 back into the red zone

Benchmark index loses 596.10 points to settle at 38,223.55

KARACHI: The stock market returned to its usual downtrend in Thursday’s session as ongoing political uncertainty about whether parliament would complete its tenure and Pakistan Awami Tehreek chief Tahirul Qadri’s determination to hold a sit-in in the capital dampened investor sentiment.

A poor macroeconomic situation resulting in the rupee weakening to a record low against the dollar also compounded existing worries for the investors. It caused major losses in notable index names across most heavyweight sectors which triggered bearish momentum in the market from the beginning.

At the end of trading, the benchmark KSE 100-share Index registered a decrease of 596.10 points or 1.54% to settle at 38,223.55.

Elixir Securities analyst Zainul Abedin said Pakistan equities turned back south as the benchmark index plummeted to an intra-day low of 38,127 points with political noise pretty much to blame for the decline.

The market opened lower as stocks carried the bearish momentum from the word go and all major sectors including oil, financial, cement and steel remained in the red throughout the trading session on extremely dull volumes.



Blue chips like Hub Power (-2.6%), MCB Bank (-1.6%), Pakistan State Oil (-3.3%) and Engro Corp (-1.7%) traded lower and dented the KSE-100 Index. DG Khan Cement (-5%), International Steels (-4.9%) and Pak Elektron (-5%) were among the major losers that kept sentiments dampened as they slid towards their lower limits.

“With key support around 37,500, we expect the benchmark index to consolidate and trade in a 800 to 1,000-point range in the near-term,” he added.

JS Global analyst Danish Ladhani said the bourse was under pressure throughout the day as the index closed at 38,223, down 596 points.

“We believe the decline was mainly due to the ongoing political situation in the country. Moreover, the rupee weakened to a record low amidst expected pressure on the balance of payments,” Ladhani said.

Major movers were Indus Motor (+1.68%), Thal Limited (+0.93%), Packages Limited (+0.07%) and Sui Northern Gas Pipelines (+0.41%) whereas major laggards were Mari Petroleum (-2.14%), National Refinery (-5%), Pak Suzuki Motor Company (-3.60%) and Attock Refinery (-4.94%), contributing -43 points to the index.

Traded volumes plunged 21% to 93 million shares whereas the traded value dropped to $37 million.

In the oil and gas exploration and production sector, Pakistan Oilfields (-1.46%), Pakistan Petroleum (-0.95%) and Oil and Gas Development Company (-0.49%) closed in the red, further adding to the decline.



The cement sector recorded a sharp decline due to falling cement prices in the wake of the seasonal impact. Maple Leaf Cement (-3.79%), Fauji Cement (-4.92%), DG Khan Cement (-5%) and Lucky Cement (-1.16%) were major laggards of the sector.

“Moving forward, we expect the market to remain weak and recommend investors to remain cautious,” Ladhani added.

Overall, trading volumes fell to 92 million shares compared with Wednesday’s tally of 117 million.

Shares of 347 companies were traded. At the end of the day, 59 stocks closed higher, 269 declined while 19 remained unchanged. The value of shares traded during the day was Rs4.1 billion.

TRG Pakistan was the volume leader with 10.3 million shares, losing Rs1.59 to close at Rs30.22. It was followed by K-Electric with 8.3 million shares, losing Rs0.28 to close at Rs6.10 and Pak Elektron with 6.3 million shares, losing Rs2.31 to close at Rs44.00.

Foreign institutional investors were net buyers of Rs206 million during the trading session, according to data compiled by the National Clearing Company of Pakistan.