KARACHI: Bears dominated trading at the stock market on Monday as the benchmark index remained in the negative territory for most of the day.
After a positive open for a brief period, the KSE-100 dropped 289 points as selling pressure took over due to the hike in key interest rate.
The central bank increased the interest rate by 100 basis points to 8.5% on Saturday citing persistent concerns over the economic front on the back of rising inflation and large twin deficits.
Although the index changed its direction later in the day, it failed to make any gains. At close, the benchmark KSE 100-share Index recorded a decrease of 69.15 points or 0.17% to settle at 40,929.44.
Elixir Securities' analyst Murtaza Jafar said equities traded lower for most part of the day with the benchmark KSE-100 index settling below 41,000. "Retail plays continued to dominate volume charts," he added.
Stock market experiences dull week amid economic concerns
Tariq Glass (-2.2%) announced its FY18 result, posting earnings per share of Rs14.94 along with cash dividend of Rs6 per share.
"We expect the market to remain range bound until clarity emerges on sources of external funding as a high-level delegation has arrived from Saudi Arabia to discuss matters of mutual interest and potential offer of oil supply on deferred payments," Jafar said.
JS Global analyst Maaz Mulla said the market started on a negative note and came under duress.
Cement and exploration and production stocks pulled the market down where Lucky Cement (-1.12%), DG Khan Cement (-1.75%), Pakistan Oilfields (-0.20%) and Oil and Gas Development Company (-0.69%) closed lower.
However, he said, it seemed that the hike in interest rate did not have much impact on financial stocks as mixed sentiments were noted. MCB Bank (-0.17%) and United Bank (-0.35%) fell whereas Habib Bank (+0.29%) was slightly positive.
Major heavyweights namely Habib Bank, Oil and Gas Development Company, MCB Bank, United Bank, Pakistan Oilfields, Fauji Fertiliser (-0.65%) and Lucky Cement cumulatively wiped 44 points off the index.
Market watch: KSE-100 ends positive as investors await monetary policy
"Moving forward, we expect the market to remain volatile and choppy with lack of any immediate triggers," he said.
Overall, trading volumes decreased to 106.3 million shares compared with Friday's tally of 145.9 million. The value of shares traded during the day was Rs3.5 billion.
Shares of 366 companies were traded. At the end of the day, 117 stocks closed higher, 222 declined and 27 remained unchanged.
The Bank of Punjab was the volume leader with 21.2 million shares, losing Rs0.04 to close at Rs11.79. It was followed by Unity Foods with 14.9 million shares, gaining Rs0.56 to close at Rs31.99 and Pak Elektron with 4 million shares, gaining Rs0.47 to close at Rs31.21.
Foreign institutional investors were net sellers of Rs364.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
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