Market watch: KSE-100 loses ground for third successive session

Benchmark index decreases 236.81 points to settle at 36,547.63

KARACHI: The downward trend continued for the third successive session at the stock market on Thursday as the KSE-100 index fell further deep into the red mainly due to selling pressure in the cement sector and concern over ongoing talks with the International Monetary Fund (IMF).

The KSE-100 opened on a positive note, but it soon slipped into the negative territory as investors were cautious in the wake of fears of strict IMF conditions and a tough upcoming budget, which dampened sentiments.

The market continued its bearish run throughout the session as a high inflation added to the sombre mood. Participants were concerned over the macroeconomic indicators because the central bank may resort to further tightening of the monetary policy in May.


At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 236.81 points, or 0.64%, to settle at 36,547.63.

Topline Securities, in its report, stated that the KSE-100 index lost 237 points amid ongoing meetings with an IMF team and uncertainty about key economic issues.

"Investors' main concerns were the tax amnesty scheme, privatisation programme, power and gas tariffs, and IMF conditions," it said.

Bank, food and power sectors mainly pushed down the index as they chipped away 129 points. Selling was seen in select banks among which HBL, Meezan Bank and UBL erased 18 points, 12 points and 11 points respectively from the index.

JS Global analyst Danish Ladhani said equities closed on a bearish note with the benchmark KSE-100 index shedding 237 points.

"The inflation rate eased to 8.82% year-on-year in April 2019 from 9.41% in the previous month, which was the highest level since November 2013," he pointed out.

Hubco (-2.2%) was the major laggard in the power sector whereas SNGPL (-0.7%) and Kot Addu Power Company (-0.4%) also closed in the red.

In the auto sector, Pak Suzuki Motor Company (+5%) hit its upper circuit whereas in the financial sector, HBL (-0.9%), UBL (-0.7%), Meezan Bank (-1.9%) and MCB Bank (-0.1%) were the major laggards. Lucky Cement (-0.3%) and DG Khan Cement (-0.5%) fell in the cement sector.



"We expect the market to remain volatile and recommend investors to stay cautious in the short run before finalisation of an IMF programme," the analyst said.

Overall, trading volumes decreased to 67.9 million shares compared with Tuesday's tally of 110.6 million. The value of shares traded during the day was Rs2.5 billion.

Shares of 323 companies were traded. At the end of the day, 74 stocks closed higher, 232 declined and 17 remained unchanged.

Unity Foods was the volume leader with 7 million shares, losing Rs0.81 to close at Rs12.55. It was followed by Fauji Foods with 6.98 million shares, losing Rs0.96 to close at Rs19.16 and Maple Leaf Cement with 6.5 million shares, losing Rs0.03 to close at Rs28.14.

Foreign institutional investors were net buyers of Rs10.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.