Market watch: KSE-100 plunges over 700 points as macroeconomic concerns increase

Benchmark 100-share index loses 1.6% to finish trading at 43,228.90

KARACHI: Stocks reacted sharply to developments on the economic front with the KSE-100 losing almost 788 points in intra-day trading on Tuesday.

Concerns over the country’s economic outlook dragged the index lower, according to Topline Securities’ analyst Nabeel Khurshid. Investors are viewing the third round of devaluation with apprehension, he commented. There are concerns whether the devaluation was needed and if the strategy will work as it has so far failed to curtail the import bill.

The widening trade deficit and alarmingly low foreign exchange reserves also aggravated matters, as selling pressure was witnessed in stocks across the board, with the auto sector bearing the brunt. Moreover, investors also reacted to the hike in oil prices, which raised concerns that the import bill will continue to increase.

At close, the benchmark KSE 100-share Index recorded a decrease of 702.26 points or 1.6% to settle at 43,228.90. JS Global’s Maaz Mulla said negativity prevailed across the board as the index lost 702 points to close at 43,229.

“The market remained under pressure throughout the session after the US dollar surged to record high against the Pakistan R=rupee in the interbank market yesterday, touching Rs121 before settling at Rs119.8 to a dollar,” Mulla said.

“Moreover, major heavyweights namely, HBL (-3.5%), OGDC (-0.7%), PPL (-0.1%), UBL (-3.5%), ENGRO (-0.6%), MCB (-2.3%), LUCK (-2.8%), POL (-1.0%), FFC (-1.6%) cumulatively contributed -309 points. Traded volumes plummeted by 14% day-on-day to 138 million shares while value traded decreased to $50 million. Top volume stocks were BOP (-2.9%), LOTCHEM (-2.3%) and PAEL (-5.0%). Once again, cements, financials and energy stocks drove the market down owing to political and economic crux in the country. HBL (-3.5%) and UBL (-3.5%) closed in the red.

“Moreover, LUCK (-2.8%) and DGKC (-4.9%) closed negative in the cement space.”



Mulla said the market is expected to remain choppy with flows from local and foreign institutions determining direction.

Overall, trading volumes decreased to 137.8 million shares compared with Monday’s tally of 160.1 million. The value of shares traded during the day was Rs5.97 billion.

Shares of 339 companies were traded. At the end of the day, 48 stocks closed higher, 274 declined while 17 remained unchanged.

The Bank of Punjab was the volume leader with 11.45 million shares, losing Rs0.38 to close at Rs12.86. It was followed by Siddiqsons (R) with 10.8 million shares, losing Rs0.7 to close at Rs2.3 and Fauji Cement with 9.9 million shares, losing Rs1.23 to close at Rs23.71.

Foreign institutional investors were net sellers of Rs171.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.

Published in The Express Tribune, June 13^th, 2018.

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