KARACHI: The stock market closed lower on Tuesday in the wake of ongoing talks with the International Monetary Fund (IMF) for a bailout package and dismal data on inflation, which was recorded at 9.41% in March 2019 on a year-on-year basis.
The KSE-100 index went down after making gains of 203 points in the beginning and lost 356 points by the end of the session.
Weakness of the rupee against the US dollar, 25% fall in petroleum product sales in July-March 2018-19, hike in domestic oil and liquefied petroleum gas (LPG) prices and uncertainty over the outcome of Financial Action Task Force's review played the role of catalysts in the bearish close.
At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 318.82 points or 0.83% to settle at 38,036.03.
Market watch: Index retreats 295 points amid dull trading
Topline Securities, in its report, said the KSE-100 index continued its downward march because of negative investor sentiments, which affected equities, amid dollar's appreciation against the rupee, which traded at Rs141.1 (+0.14%/Rs0.20). This came after news reports that Pakistan would be opting for a flexible exchange rate compared to the current managed float mechanism, it said.
Market sentiments were further impacted by the higher-than-expected Consumer Price Index (CPI) inflation, which hit 9.4% in March 2019, the highest in five years, sparking expectations of further rate hike, the report said.
"Commercial banks were the worst performing sector, erasing 117 points from the index. They were followed by oil marketing companies (OMCs) and the power sector, which cumulatively struck 76 points off the index."
Investors' participation improved as compared to Monday's trading session as volumes and value went up 120% and 39% respectively, according to the report.
Market watch: Weak global economic outlook prompts sell-off in Pakistan's market
Overall, trading volumes increased to 144.6 million shares compared with Monday's tally of 65.9 million. The value of shares traded during the day was Rs3.9 billion.
Shares of 332 companies were traded. At the end of the day, 77 stocks closed higher, 232 declined and 23 remained unchanged.
Unity Foods (R) was the volume leader with 62.8 million shares, gaining Rs0.93 to close at Rs3.46. It was followed by K-Electric with 8.9 million shares, losing Rs0.16 to close at Rs5.25 and Unity Foods with 6.6 million shares, gaining Rs0.67 to close at Rs13.45.
Foreign institutional investors were net sellers of Rs143.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.