KARACHI: The stock market extended its decline on Thursday as political developments took a toll on investor sentiments.
The benchmark KSE-100 index oscillated between red and black zones for the early part of the day. However, selling pressure continued to mount as the corporate-sector regulator’s new regulations to combat money laundering, US secretary of state’s visit to Pakistan and confusion over the IMF bailout pushed investors to book profits.
Additionally, cement stocks also pulled the KSE-100 index down and came under pressure following a decline in sales for August 2018.
At close, the benchmark KSE 100-share Index recorded a decrease of 354.57 points or 0.85% to settle at 41,266.39.
Elixir Securities’ analyst Muhammad Arbash said equities continued their slide with the benchmark KSE-100 index closing below 41,300 points.
“After a sideways start, the market moved between positive and negative zones in first half of the day on extremely thin volumes. Later, retail-favourite speculative stocks started coming under pressure with a number of them closing at their lower circuits, especially those within the overvalued food space,” he said.
Unity Foods, Fauji Foods and Matco Foods all hit their lower price limits as they lost 5% of their value.
By the day’s close, mainboard cement stocks faced institutional selling with Lucky Cement (-2.7%) and DG Khan Cement (-4.8%) being the main laggards of the sector and cumulatively erasing 65 points from the KSE-100 index.
Habib Bank (+1.2%) and United Bank (+1.5%) posted gains and cumulatively added 52 points to the benchmark index.
“[We] expect a choppy behaviour in the near term; we remain sceptical about future market direction given inevitable slowdown in economic growth post-expected measures to tame the twin deficit,” Arbash said.
Overall, trading volumes increased to 159.7 million shares compared with Wednesday’s tally of 126.9 million. The value of shares traded during the day was Rs4.9 billion.
Shares of 373 companies were traded. At the end of the day, 82 stocks closed higher, 276 declined while 15 remained unchanged.
The Bank of Punjab was the volume leader with 43.3 million shares, gaining Rs0.32 to close at Rs11.96. It was followed by Ghani Auto (R) with 10.1 million shares, gaining Rs0.76 to close at Rs0.77 and Engro Polymer with 6.7 million shares, gaining Rs0.18 to close at Rs33.31.
Foreign institutional investors were net sellers of Rs18.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.