Market watch: Stocks continue to take a hammering as KSE-100 dives 1,328 points

Benchmark index decreases 3.39% to settle at 37,898.29

KARACHI: The stock market faced on Monday another round of battering as the KSE-100 index nosedived nearly 1,500 points in intra-day trading and ended its sixth successive trading session with a hefty decline.

Following a brief stay in the positive territory, the index continued its journey towards the south, falling below 37,900 points. There was no respite for the anxious investors who offloaded stocks amid mounting concerns over the national economy. Selling pressure was witnessed in stocks across the board.

"The market has maintained the downturn due to the government's lack of clarity on the economic policy," Arif Habib Limited analyst Tahir Abbas told The Express Tribune.

Although the government has hinted at going back to the International Monetary Fund (IMF) for a bailout to fix the sagging economy, people want a clear statement.

Market participants want to know how much financing is coming from financial institutions and what role the investment from Saudi Arabia will play.



Commenting on the situation, Arif Habib Head of Sales Saad bin Ahmed said the market outlook remained negative. "Technically speaking, the market is heading towards 36,000 points," he said.

At close, the benchmark KSE 100-share Index recorded a decrease of 1,328.06 points or 3.39% to settle at 37,898.29.

Elixir Securities' analyst Murtaza Jafar said equities faced another round of selling spree as the benchmark index touched its lowest level since June 15, 2016 with declines of 7.6% and 6.4% respectively so far in the current month and calendar year.

"Panic selling was witnessed in retail names on reported margin selling while index-heavy MSCI scrips also came under renewed selling pressure on reported sell-off from FII (foreign institutional investors) and potential redemption from mutual funds," the analyst commented.

During the day, the rupee also weakened by another 1.5% in the open market to Rs129.5 against the greenback.



"Conclusion of the Financial Action Task Force (FATF) review meeting and clarity on the funding of depleting foreign exchange reserves are likely to restore investor confidence," Jafar said.

JS Global analyst Danish Ladhani said the index hit an intra-day high of +71 points and intra-day low of -1,457 points.

"This volatility was due to reports of delay in the International Monetary Fund (IMF) bailout package till December," he pointed out.

On the economic front, the Asian Development Bank (ADB) has expressed willingness to provide $7.1 billion in financing to help Pakistan achieve inclusive and sustainable growth over the next three years.

Furthermore, final negotiations between the FATF and the government have begun in the federal capital.

"All the sectors were battered where financial, cement, power and energy stocks closed in the red. Top stocks Habib Bank (-5%), United Bank (-5%), Lucky Cement (-5%) and DG Khan Cement (-5%) closed at their lower circuits," he said.



Major heavyweights namely Habib Bank (-5%), Pakistan Petroleum (-2.85%), Oil and Gas Development Company (-2.38%), Engro (-2.76%), MCB Bank (-1.19%), United Bank (-5%), Fauji Fertilizer (-4.77%) and Pakistan Oilfields (-3.88%) cumulatively struck 491 points off the index.

"Moving forward, we expect investors' sentiment to remain dull. Therefore, the KSE-100 performance will likely remain under pressure amid selling from foreign investors," Ladhani added.

Overall, trading volumes increased to 186 million shares compared with Friday's tally of 154.1 million. The value of shares traded during the day was Rs6.3 billion.

Shares of 385 companies were traded. At the end of the day, 30 stocks closed higher, 341 declined and 14 remained unchanged.

The Bank of Punjab was the volume leader with 18.4 million shares, losing Rs0.85 to close at Rs10.12. It was followed by K-Electric Limited with 12.2 million shares, losing Rs0.23 to close at Rs4.77 and WorldCall Telecom with 10.3 million shares, losing Rs0.04 to close at Rs1.64.

Foreign institutional investors were net sellers of Rs928.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.