Market watch: KSE-100 ends marginally negative as bank stocks rally

Benchmark index falls 93.83 points to close at 44,457.30

KARACHI: The stock market witnessed a choppy trading session on the opening day of the week, ending 94 points lower to close in the red zone for the third successive time.

Trading began on a positive note, as the KSE-100 Index shot up 300 points to hit an intra-day high of 44,855.77 points. Despite low activity, a rally was witnessed in the banking sector owing to an interest rate hike by the State Bank of Pakistan on Friday. Later, the market continued directionless leading the index to drop to an intra-day low of 44,337.72. Although late buying helped the index make some recovery, it finished the day in the negative territory.

At close, the KSE-100 Index ended with a decrease of 93.83 points or 0.21% to finish at 44,457.30 points.



Elixir Securities' analyst Jawwad Abubakr said Pakistan equities closed lower after volatile trading on listless turnover.

"Start to the day was on a positive note as the benchmark KSE-100 Index was pushed up by gains in financials that came under the limelight post surprise 25 basis points hike in policy rate announced by the central bank on Friday," Abubakr commented.

"Notably, mid-caps banks that were most sensitive to rates reversal such as Faysal Bank (FABL PA +5%), Bank Alfalah (BAFL PA +5%) and Bank Al-Habib (BAHL PA +5%) fetched the most buying interest and hit the respective upper price limits.

"Companies in other sectors such as cements, fertilisers, steels and textiles that have some degree of leverage in their books reacted negatively to the monetary policy statement event as hardening rates not only increase the borrowing costs but also curtail demand growth."



Meanwhile, listed dairy company Fauji Foods (FFL PA -5%) hit the lower price limit on weekend news of Sindh court banning its milk brand along with the brands of three other companies; Engro Foods (EFOODS PA +5%) that stands to benefit from the ban closed at the upper price limit.

"We advise investors to take advantage of the current weakness in value plays and recommend building positions," the analyst added.

Overall, trading volume decreased to 192 million shares, compared with Friday's tally of 271 million.

Shares of 377 companies were traded. At the end of the day, 152 stocks closed higher, 208 declined while 17 remained unchanged. The value of shares traded during the day was Rs8 billion.

Dewan Cement was the volume leader with 23.7 million shares, gaining Rs1.16 to close at Rs24.41. It was followed by Bank of Punjab with 23.3 million shares, gaining Rs0.37 to close at Rs10.31 and Faysal Bank with 7.6 million shares, gaining Rs1.17 to close at Rs24.62.

Foreign institutional investors were net sellers of Rs377.9 million during the trading session, according to data compiled by the National Clearing Company of Pakistan.