Market watch: Bourse drops 445 points as investors offload holdings

Benchmark index decreases 1.08% to settle at 40,887.35

KARACHI: Bears dominated trading at the stock market on Friday and the KSE-100 index dropped 445 points as investors were concerned whether the market would sustain the 40,000-point level.

Following a brief open in the positive, investors resorted to profit-booking, resulting in a decline of nearly 500 points in the KSE-100 index at the end of first session. Volatility prevailed in the second session, following which the bourse went below 40,900 points by the day's end.

At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 445.4 points, or 1.08%, to settle at 40,887.35.

Index-heavy sectors including exploration and production and automobile bore the brunt of weak sentiments and remained in the red.



Arif Habib Limited, in its report, stated the KSE-100 index fell again by a wide margin, causing concern among investors if they had already seen the top and the index would not sustain the 40,000 mark.

"The market got choppy by the end of trading and investors did not consider holding positions for the weekend," it said. "Engro Fertilisers' result failed to impress investors and despite phenomenal results, the company's stock received a battering."

Major volumes were recorded in K-Electric, Pakistan International Bulk Terminal (PIBT), Pak Elektron and Engro Fertilisers, but these stocks were in the red, except for PIBT (+2.4%).

Sector-wise activity was mainly seen in power, cement and chemical sectors whereas the financial sector lost investors' interest.

Stocks that contributed positively included Fauji Fertiliser (+20 points), PIBT (+6 points) and Standard Chartered (+3 points). Stocks that contributed negatively were Habib Bank (-47 points), Hubco (-33 points) and Oil and Gas Development Company (OGDC, -31 points), the report added.

JS Global analyst Danish Ladhani said the bourse remained range bound with slight improvement in volumes. Average daily traded value came in at $62 million, up 42%, and volumes stood at 169 million shares, up 23%.

On the economic front, Prime Minister Imran Khan will visit Dubai on February 10 on a day-long visit on the invitation of Sheikh Mohammad bin Rashid Al-Maktoum to participate in seventh edition of the World Government Summit.



Major sectors dragged the index down where heavyweight stocks including Habib Bank (-2%), Pakistan Petroleum (-0.8%), Engro (-1.4%), OGDC (-1.5%), MCB Bank (-1.1%), Hubco (-1.8%), United Bank (-1.4%), Lucky Cement (-1.1%), Pakistan Oilfields (-2%) and Bank AL Habib (-0.6%) erased a cumulative 250 points from the index.

Mixed sentiments were witnessed in the cement sector where Lucky Cement (-1.1%) and Maple Leaf Cement (-0.3%) were the major laggards whereas DG Khan Cement (+0.5%) and Fauji Cement (+0.6%) were the gainers.

Mixed sentiments were also noted in the fertiliser sector where Fauji Fertiliser (+1.2%) and Fauji Fertilser Bin Qasim (+0.6%) remained in the black.

The sector reacted to the report that the government had proposed to waive Rs200 billion worth of outstanding gas infrastructure development cess (GIDC) for various sectors for settlement of the matter.

Furthermore, major contribution to the market volume came from Lotte Chemical (-1.3%), Pak Elektron (-3.5%), Pakistan International Airlines (-2.2%) and The Bank of Punjab (-0.6%).

"We expect the market to remain range bound in upcoming sessions, however, sentiments are expected to be positive in the long run," the analyst added.

Overall, trading volumes increased to 169.1 million shares compared with Thursday's tally of 137.7 million. The value of shares traded during the day was Rs8.56 billion.

Shares of 336 companies were traded. At the end of the day, 81 stocks closed higher, 233 declined and 22 remained unchanged.

K-Electric was the volume leader with 23.24 million shares, losing Rs0.11 to close at Rs6.38. It was followed by PIBT with 13.41 million shares, gaining Rs0.29 to close at Rs12.61 and Pak Elektron with 10.47 million shares, losing Rs0.99 to close at Rs27.29.

Foreign institutional investors were net buyers of Rs434.44 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.