KARACHI: The stock market witnessed another round of bearish trading on Thursday as news of failed talks with the International Monetary Fund (IMF) pushed the benchmark index down.
The KSE-100 index plunged from the moment trading began, dropping 622 points, and hit an intra-day low of 40,795.96 points. Investors were disillusioned by the government’s failure to negotiate a successful deal for a bailout package.
Additionally, the lack of positive triggers also dented sentiments, dragging the index below the 41,000 mark.
A United Bank Limited (UBL)’s notice to the stock exchange which said the bank was voluntarily liquidating its New York branch did not help matters. Selling pressure was evident in the stock along with other banking and exploration and production (E&P) stocks.
At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 545.21 points or 1.32% to settle at 40,874.03.
Elixir Securities’ analyst Murtaza Jafar said, “In line with our initial view, the KSE-100 index traded under pressure and closed below 41,000 as investors reacted to the deadlock in negotiations between the government and an IMF delegation.”
Selling pressure was particularly high in the E&P stocks on the back of a decline in global crude oil prices. Pakistan Oilfields Limited (-4.57%), Pakistan Petroleum Limited (-3.65%) and Oil and Gas Development Company (-3.41%) collectively contributed 209 points to the decline of the index.
UBL (-2.35%) announced that it was voluntarily liquidating and surrendering its banking licence in line with New York banking laws after carefully reviewing the viability of its branch operations subject to all regulatory approvals.
On the other hand, aggressive buying activity was witnessed in stocks of construction and material companies as international coal futures tumbled below $90 per ton. Cherat Cement Company (+2.61%) and Lucky Cement (+0.46%) managed to shine amongst the peers.
“We expect the market to consolidate around 40,500 points; we prefer UBL, The Bank of Punjab and Lucky Cement at current levels,” he added.
Overall, trading volumes decreased to 160.2 million shares compared with Tuesday’s tally of 167.3 million. The value of shares traded during the day was Rs8.1 billion.
Shares of 362 companies were traded. At the end of the day, 78 stocks closed higher, 268 declined and 16 remained unchanged.
Lotte Chemical was the volume leader with 17.14 million shares, losing Rs0.42 to close at Rs19.27. It was followed by Engro Polymer with 10.97 million shares, gaining Rs0.07 to close at Rs40.41 and Pak Elektron with 9.96 million shares, losing Rs0.38 to close at Rs32.90.
Foreign institutional investors were net sellers of Rs270.95 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.