Market watch: KSE-100 extends losses, falls 425 points

Benchmark index decreases 1.16% to settle at 36,122.95

The stock market continued to remain under bearish pressure on Friday and the benchmark index lost 425 points, which was the fourth consecutive session in the red.

The market took a hit on investor fears over likely tough International Monetary Fund (IMF) conditions for a $6.5-billion bailout package for Pakistan, said Ahsan Mehanti of Arif Habib Corp. Reports of IMF's demand for a 25% increase in power tariff played the role of a catalyst in bearish close of the market, he said.

Apart from that, falling international crude oil prices sparked selling in exploration and production (E&P) stocks.

Earlier, the market opened on a negative note and fell steadily throughout the first session, wiping off 300 points. The second session saw the market extend its losses and it closed just above the 36,100-point mark.



At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 424.68 points, or 1.16%, to settle at 36,122.95.

JS Global analyst Maaz Mulla said trading at the bourse remained lacklustre as the index traded between an intra-day high of +9 points and intra-day low of -477 points. It closed at 36,123, down 425 points, due to political scepticism and uncertain economic scenario in the country.

"Volumes stood low at 64 million shares versus 68 million shares on Thursday," he said. "Friday's volume leaders were Unity Foods (-0.7%), Fauji Cement (-1.5%) and The Bank of Punjab (-2%) with a cumulative 15 million shares changing hands."

Moreover, the Asian Development Bank (ADB) was expected to give $1 billion in budgetary support to Pakistan soon after the go-ahead came from the IMF.

The E&P sector inched lower on the back of decrease in international crude oil prices, which traded below $61.81 per barrel. Pakistan Oilfields (-3.2%), Pakistan Petroleum (-2.7%) and Oil and Gas Development Company (OGDC, -1.7%) were major movers of the E&P sector.

Inflation was recorded at 8.8% in April 2019 on a year-on-year basis compared with 9.4% in March 2019 and 3.7% in the same month of 2018.

The cement sector closed on a weak note where major players including Pioneer Cement (-4.6%), Fauji Cement (-1.5%), Lucky Cement (-0.6%) and DG Khan Cement (-1.3%) remained in the red zone.



"We expect the market to remain volatile and recommend investors to stay cautious in the short run ahead of the end of IMF meetings," the analyst added.

Arif Habib Limited, in its report, stated that the stock market opened on a negative note with a dull outlook. "After a negligible move of +9 points, the index continued to fall and by the end of first session, the market was down 315 points with a paltry trading volume of 26 million shares," it said.

The second session saw a further decline and the index slid a total of 476 points. Selling was recorded across the board, mainly in banks and E&P companies.

Declining international crude prices hit E&P stocks with OGDC falling 1.8% and recording trading volume of 2.4 million shares.

Overall, trading volumes decreased to 64.3 million shares compared with Thursday's tally of 67.9 million. The value of shares traded during the day was Rs2.9 billion.

Shares of 323 companies were traded. At the end of the day, 88 stocks closed higher, 218 declined and 17 remained unchanged.

Unity Foods was the volume leader with 9.1 million shares, losing Rs0.09 to close at Rs12.46. It was followed by Fauji Cement with 3.2 million shares, losing Rs0.28 to close at Rs17.85 and The Bank of Punjab with 3 million shares, losing Rs0.25 to close at Rs12.13.

Foreign institutional investors were net buyers of Rs381.15 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.