Market watch: KSE-100 dips 394 points as investors stay cautious

Benchmark index decreases 1.02% to settle at 38,398.30

KARACHI: After remaining positive for the past two sessions, the stock market came under pressure on Thursday following losses in regional markets.

The KSE-100 index started falling from the moment trading began as concerns over the national economy turned investors jittery. The index slipped over 500 points in intra-day trading, before late buying helped it recover some ground.

Lucky Cement received a battering and traded near its lower price limit, apparently because of expectation that the stock would be removed from the MSCI Emerging Market index in the scheduled revision next month.

United Bank was also hammered for the same reason with trading volumes of 6.5 million shares and price decline of 1.9%.

At close, the benchmark KSE 100-share Index recorded a decrease of 393.79 points or 1.02% to settle at 38,398.30.

Elixir Securities' analyst Murtaza Jafar said in line with the initial view, the KSE-100 index traded under pressure during the day while tracking losses in regional markets.



"K-Electric Limited (+5.14%) led the volume charts after media reports said the government was likely to issue NOC to Shanghai Electric Power for the purchase of 66.4% stake in the power company from Abraaj ahead of PM Imran Khan's visit to China in mid-November," he said.

Lucky Cement (-4.52%) faced renewed selling pressure with 450,000 shares changing hands as estimates suggested that the company - along with United Bank Limited (-1.52%) - may be excluded from the MSCI Emerging Market index in the next semi-annual review on November 13.

"Our chartist eyes immediate support around 37,500- 37,700 points, however, any break below this will lead to further downslide to 34,600-35,500," he added.

JS Global analyst Danish Ladhani said after a sideways trading session in early hours, the market consistently came down, hitting a low of 535 points.

"According to reports, a mission of the International Monetary Fund (IMF) is likely to visit Islamabad to initiate talks on a bailout package after Pakistan requested for financial assistance," Ladhani said.

"Moreover, a delegation of the Asia Pacific Group has asked Pakistan to do more so that it may get out of the grey list of the Paris-based Financial Action Task Force (FATF)."

Cement, commercial bank and oil and gas exploration sectors emerged as top laggards as they collectively lost 209 points.



Major heavyweights namely Lucky Cement (-4.52%), DG Khan Cement (-0.71%), Habib Bank (-2.91%), MCB Bank (-1.47%), Pakistan Petroleum (-0.64%) and Oil and Gas Development Company (-0.78%) closed lower.

Cumulatively, Habib Bank (-2.91%), Oil and Gas Development Company (-0.78%), Engro (-0.89%), MCB Bank (-1.47%), Pakistan Oilfields (-1.95%), United Bank (-1.52%) and Fauji Fertilizer Company (-1.25%) erased 190 points from the index.

"Moving forward, we expect investor's sentiment to remain choppy. Therefore, the KSE-100 shall remain under pressure along with selling pressure from foreign investors," Ladhani added.

Overall, trading volumes decreased to 134.6 million shares compared with Wednesday's tally of 199.3 million. The value of shares traded during the day was Rs5.31 billion.

Shares of 356 companies were traded. At the end of the day, 109 stocks closed higher, 232 declined and 15 remained unchanged.

TRG Pakistan was the volume leader with 12.02 million shares, losing Rs0.83 to close at Rs23.72. It was followed by K-Electric with 12.01 million shares, gaining Rs0.25 to close at Rs5.11 and Meezan Bank (XDXB) with 8.51 million shares, gaining Rs0.43 to close at Rs91.06.

Foreign institutional investors were net sellers of Rs1.19 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.