Market watch: Stocks hammered as KSE-100 falls 687 points

Benchmark index decreases 1.81% to settle at 37,167.02

KARACHI: The stock market endured another spell of bearish trade on Friday as the benchmark index plunged over 900 points in intra-day trading before making some recovery. It closed the third successive session in the red.

The Pakistan Stock Exchange (PSX) continued its downward trajectory amid panic selling by investors as it had yet to find a base for a turnaround. The selling spree pushed the benchmark index below the 37,000-point barrier in intra-day trading.

Despite a brief open in the positive, the KSE-100 index failed to sustain the momentum. Although late buying helped the index recover some ground, it still ended the week deep in the red.

"Institutions (insurance companies and mutual funds) have continued to sell and repurchase at lower levels," Arif Habib Limited Head of Equity Sales Saad bin Ahmed told The Express Tribune.

At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 686.55 points or 1.81% to settle at 37,167.02.



The index has dropped 3%, or 1,142.51 points, in the past three days.

The rollercoaster ride has yet to settle at the PSX. "Traders are making cautious buying…buyers are there in the market after every sell-off," Ahmed said.

Though institutional selling, particularly by insurance firms, was unexpected at the year-end, panic selling continued to drag the benchmark index down.

Besides, it was the last day of the roll-over week in which traders either made payments to settle debt or rolled over securities on the futures counter. The settlement also sparked selling pressure in the market.

Since the roll-over volume was low at Rs4-4.5 billion in the morning against usual Rs12-12.5 billion, the selling pressure coming from the futures counter would easily be settled in the second half, he said.

Panic selling had also been triggered by fears of inclusion of some of the stockbrokers in the list of 172 people that had received tax letters from the Federal Board of Revenue (FBR).



"Fortunately, no broker featured among the 172 recipients of letters. So, the selling pressure coming from this front came to an end," the analyst said. "If the selling pressure persists, the index could go down to 36,000 points," he said.

Banking and chemical stocks were on top of the selling list while volumes were better than the previous day, he added.

JS Global analyst Maaz Mulla said the cement sector continued to move south where big players lost value to close in the red. DG Khan Cement (-5%), Fauji Cement (-4.4%), Maple Leaf Cement (-4%), Cherat Cement (-3.5%) and Lucky Cement (-2.2%) were major losers of the sector.

Banking stocks also fell including Habib Bank (-1.9%), United Bank Limited (-3.4%) and MCB Bank (-1.6%) which lost value.



"Moving forward, we expect bearish sentiments to continue on the back of political uncertainties and worrying economic indicators. Also, potential redemptions in mutual funds are likely to cause further selling pressure. Hence, we recommend investors to remain cautious," Mulla added.

Overall, trading volumes increased to 174.4 million shares compared with Thursday's tally of 103.7 million. The value of shares traded during the day was Rs8.3 billion.

Shares of 341 companies were traded. At the end of the day, 89 stocks closed higher, 238 declined and 14 remained unchanged.

The Bank of Punjab was the volume leader with 14.3 million shares, losing Rs0.32 to close at Rs12.40. It was followed by Lotte Chemical with 13.2 million shares, losing Rs0.73 to close at Rs17.01 and K-Electric Limited with 12.4 million shares, losing Rs0.03 to close at Rs5.92.

Foreign institutional investors were net sellers of Rs154.75 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.