Market watch: Bourse sheds 143 points in wake of rupee depreciation

Benchmark index decreases 0.35% to settle at 40,496.03

KARACHI: The stock market lost some ground in volatile trading on Friday as investor sentiments were dented by another round of massive rupee depreciation.

In the morning, the market got off to a positive start and the index climbed nearly 300 points, but the gains proved shortlived when news of the rupee's weakening reached the bourse.

In the second half, uncertainty prevailed, which pushed the benchmark index down. The upcoming monetary policy announcement also kept investors at bay as there were expectations of an increase of 100 basis points in the key interest rate.

Later in the evening, the State Bank unveiled the policy, raising the interest rate by 150 basis points.

Index-heavy sectors such as automobile and cement bore the brunt of rupee depreciation. On the other hand, exploration and production (E&P) stocks fared well despite a reduction in petroleum product prices by the government.

At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 142.80 points or 0.35% to settle at 40,496.03.



JS Global analyst Maaz Mulla said the index fell 143 points or 0.4% during the MSCI semi-annual review. The market hit an intra-day low of -299 points and intra-day high of +298 points.

"Sudden devaluation of the local currency against the US dollar was witnessed in the inter-bank market as the greenback hit an all-time high at Rs144 during intra-day trading," he said.

The traded value of stocks stood at $178 million, up 403%, while traded volumes came in at 271 million shares, up 178%.

Major contribution to market volumes came from United Bank Limited (UBL, -1.60%), The Bank of Punjab (+0.99%) and Fauji Cement (-5%).

Heavy volumes were witnessed in Lucky Cement (-4.57%) and UBL (-1.60%) as both stocks were downgraded from the large-cap to the small-cap category in the MSCI Emerging Markets index, cumulatively contributing 90 points to the index's decline.

The cement sector took a beating where Lucky Cement (-4.57%), Pioneer Cement (-5%), Kohat Cement (-5%), Cherat Cement (-5%), Maple Leaf Cement (-5%) and Fauji Cement (-5%) closed at or near their lower locks, cumulatively erasing 121 points from the index.

Mixed sentiments were witnessed in the banking sector where MCB Bank (+3.96%) and Bank AL Habib (+2.37%) closed positive whereas Habib Bank (-1.93%), UBL (-1.60%) and National Bank (-1.16%) remained in the red zone.

The E&P sector moved higher on the back of rupee depreciation where Oil and Gas Development Company (+4.24%), Pakistan Petroleum (+4.01%) and Pakistan Oilfields (+0.93%) gained value.

"(We) expect the market to depict a similar trend and recommend investors to see any downside as an opportunity to buy cement and bank stocks," Mulla said.



Overall, trading volumes increased to 270.8 million shares compared with Thursday's tally of 97.4 million. The value of shares traded during the day was Rs23.9 billion.

Shares of 363 companies were traded. At the end of the day, 84 stocks closed higher, 254 declined and 25 remained unchanged.

UBL was the volume leader with 52 million shares, losing Rs2.3 to close at Rs141.53. It was followed by The Bank of Punjab with 29.1 million shares, gaining Rs0.13 to close at Rs13.24 and Fauji Cement with 16.5 million shares, losing Rs1.19 to close at Rs22.71.

Foreign institutional investors were net sellers of Rs4.2 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.