Market watch: Bears continue to dominate as index plummets 400 points

Benchmark index decreases 0.98% to settle at 40,520.47

KARACHI: The bearish trend from the previous week continued as the KSE-100 index plummeted nearly 670 points in intra-day trading to finish its second successive session in red.

The KSE-100 index began to decline from the moment trading began as the deteriorating economic conditions took a toll on market sentiments. Additionally, the decision pertaining to gas tariff hike by the Economic Coordination Committee (ECC) and the upcoming mini-budget also kept the investors cautious.

The bears strengthened their grip further on the bourse on the back of news that the ECC had approved an upward adjustment in gas tariff for domestic consumers. Although, the index managed a muted recovery, it still ended negative.

At close, the benchmark KSE 100-share Index recorded a decrease of 399.84 points or 0.98% to settle at 40.520.47.



Elixir Securities’ analyst Muhammad Arbash said equities started the week on a bearish note with the benchmark KSE-100 Index shedding more than 650 points during the trading session making an intra-day low of 40,255.

“Late recovery in select blue-chips; from banks and textiles, pushed the Index to 40,520 at close. Trading session kicked off marginally positive, however, it caved into selling pressure (mainly in index heavy weights; cements, steels and oil) as investors remained worried about the looming balance of payment crisis,” the analyst commented.

Approval of gas tariff hike in the ECC meeting, however, brought some relief for Sui South (SSGC PA +2.7%) and Sui North (SNGP PA +1.0%). Among key announcements, Nishat Power (NPL PA -3.5%) announced its FY18 result where it declared an EPS of Rs9.07, along with final cash dividend of Rs1.5/share.

Dawood Hercules Corporation Limited (DAWH PA -3.4%) notified the exchange about terminating the transaction of Rs17.5 billion with Edotco Pakistan.



“With a decision finally taken on gas tariff hike, investors would set their eyes on mini-budget to be unveiled Tuesday. The budget is expected to entail austerity measures to ensure fiscal discipline through higher taxes and reduction in development spending. Any further delays in taking these bold decisions will, however, dampen the sentiments further,” Arbash added.

Overall, trading volumes decreased to 145.2 million shares compared with Friday’s tally of 156.8 million. The value of shares traded during the day was Rs5.5 billion.

Shares of 358 companies were traded. At the end of the day, 68 stocks closed higher, 265 declined and 25 remained unchanged.

Lotte Chemical was the volume leader with 23.7 million shares, losing Rs0.23 to close at Rs14.21. It was followed by Unity Foods with 13.5 million shares, losing Rs1.79 to close at Rs34.52 and Descon Oxychem with 7.9 million shares, losing Rs1.53 to close at Rs29.22.

Foreign institutional investors were net sellers of Rs228.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.