Market watch: KSE-100 marginally negative after rupee depreciation

Benchmark index loses 16.95 points to finish trading at 43,931.16

KARACHI: Stocks endured a volatile ride on Monday as the KSE-100 Index oscillated between an intra-day high of 296 points and a low of 110 points amid a third round of rupee depreciation.

The KSE-100 opened upwards and managed to soar past 44,200 points. However, weak investors' sentiments, fuelled by around 5% depreciation of Pakistani rupee against the US dollar which later recovered somewhat, dragged the index lower.

Cement stocks took a big hit as all companies closed in the red. Automobile and pharmaceutical stocks also plunged with majority of the names going down. On the other hand, banks and exploration and production stocks surged and performed well.

At close, the benchmark KSE 100-share Index recorded a decrease of 16.95 points or 0.04% to settle at 43,931.16.

Elixir Securities' analyst Muhammad Arbash said Pakistan equities closed flat with the benchmark KSE-100 Index settling below 44,000.



The market opened with news of a third round of rupee depreciation in the inter-bank market as the currency crossed Rs121.5 against the US dollar.

"Export-oriented sectors such as textile (+1.3%) and sectors that had dollar-linked revenues such as exploration and production (+1.1%) and power (+1.5%) came in the limelight and traded higher," Arbash added.

Financial stocks (+0.7%) too maintained their upward momentum on expectations of a more aggressive increase in interest rates going forward.

On the flip side, cement stocks (-3.2%), steel (-4.9%) and auto (-1.4%) succumbed to profit-taking as a sharp rupee depreciation hurt demand, increased potential exchange losses and/or costs for these sectors.

Engro Corp (+2.3%) weathered the storm as investors cheered the company's announcement at the weekend on unearthing the first layer of coal from Thar block-II. The project comes under Sindh Engro Coal Mining Company and is currently three to six months ahead of schedule.



Arbash predicted a range-bound market in the near term. "With 2018 to date net foreign outflows standing at $86 million, it remains to be seen if the last six months' cumulative rupee devaluation of 15% will now help change the direction," he said.

Overall, trading volumes decreased to 160.1 million shares compared with Thursday's tally of 227.2 million. The value of shares traded during the day was Rs7.7 billion.

Shares of 341 companies were traded. At the end of the day, 106 stocks closed higher, 214 declined while 21 remained unchanged.

The Bank of Punjab was the volume leader with 24.7 million shares, gaining Rs0.2 to close at Rs13.24. It was followed by Lotte Chemical with 14.1 million shares, gaining Rs0.62 to close at Rs12.22 and Pak Elektron with 9.5 million shares, losing Rs1.96 to close at Rs37.82.

Foreign institutional investors were net sellers of Rs163.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.