Market watch: Stocks battered as KSE-100 ends eight-day winning streak

Benchmark index decreases 1.21% to settle at 41,493.97

KARACHI: The overbought stock market came under massive selling pressure on Monday as the KSE-100 index plunged over 900 points in intra-day trading before recouping almost half of the losses.

Investors opted to offload part of their holdings awaiting clarity on the financial assistance, if any, from China.

Earlier, the index dropped persistently from the moment trading began, shaving over 2% off the KSE-100 index in early hours.

"Investors returned to selling counters waiting for clarity on China's economic assistance for Pakistan," JS Global Head of Research Syed Farhan Rizvi told The Express Tribune.

"Technical correction had been overdue since the market gained over 5,000 points in the wake of announcement of a $6-billion Saudi Arabian financial package for Pakistan."

Owing to the persistent selling pressure, the index dropped to an intra-day low of 41,033.87 points from a nine-week high of 42,004 points at close on Friday.



"Investors have not lost hope for the financial assistance…China has a history of doing things secretly," said Rizvi. "Clarity on the agreement may help Pakistan achieve what it expects. It seems to be short-term stock selling. The market may rebound after touching 40,500 points on the downside in a day or two."

Amid a lack of positive triggers, investors, individuals and institutions sold shares across the board.

At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 510.12 points or 1.21% to settle at 41,493.97.

Elixir Securities' analyst Murtaza Jafar said equities traded under pressure with the KSE-100 closing at 41,494.

"While the correction was long overdue, it was mainly triggered by investors' disappointment over PM Imran Khan's visit to China, which has so far not resulted in any meaningful economic package from the neighbour to bail out Pakistan from the balance of payments crisis," the analyst said.

"By the end of last week, the media had been speculating a $6-9 billion support package from China. As PM Khan's visit to China concluded on Monday, details emanating from the finance ministry on the outcome will drive investor sentiments."



Separately, the International Monetary Fund (IMF)'s delegation is due to arrive on November 7 to discuss the modalities of a bailout programme. "We expect selling pressure to continue in cement stocks which stood out as one of the best performers in the recent rally," Jafar added.

Overall, trading volumes decreased to 214.1 million shares compared with Friday's tally of 292.4 million. The value of shares traded during the day was Rs9.5 billion.

Shares of 366 companies were traded. At the end of the day, 102 stocks closed higher, 252 declined and 12 remained unchanged.

TRG Pakistan was the volume leader with 20.8 million shares, gaining Rs0.46 to close at Rs30.99. It was followed by Engro Polymer with 18.1 million shares, gaining Rs1.41 to close at Rs37.96 and The Bank of Punjab with 12.9 million shares, losing Rs0.27 to close at Rs13.05.

Foreign institutional investors were net buyers of Rs24.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.