Market watch: KSE-100 dives 518 points amid dull volumes

Benchmark index decreases 1.43% to settle at 35,605.42

KARACHI: Stocks continued to receive a hammering as bearish trade persisted for the fifth successive session on Monday, pushing the index much below the 36,000-point mark.

Investors remained on the sidelines as volumes stood low owing to uncertainty about the International Monetary Fund (IMF) loan package and shuffling of portfolios at the top level of the government. In a surprise move, the Pakistan Tehreek-e-Insaf (PTI) government changed the central bank governor and the Federal Board of Revenue chairman.

These unfolding developments, along with deteriorating macroeconomic indicators, contributed to the dull trading. Participants also chose to stay out of the limelight ahead of budget announcement later this month. The KSE-100 index maintained a steady downward trajectory throughout the day.

At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 517.53 points, or 1.43%, to settle at 35,605.42.

AHL Research, in its report, said the market continued to remain negative amidst issues like the MSCI review on May 13, impending tough budget, possibility of a policy rate hike by the State Bank by month-end and upcoming IMF package.

"Volumes were driven by the cement sector that couldn't find a solution to the sales quota and the declining sales volume. Market volumes have been anaemic since last week, which was the case even on Monday."

JS Global analyst Maaz Mulla said the market slid amid a lack of positive triggers where the benchmark index hit an intra-day low of 553 points. "Major heavyweights namely PPL (-3%), Lucky Cement (-4.2%), Engro (-2.2%), UBL (-2.4%) and Hubco (-2.3%) dragged the index down," he said.

On the news front, Finance Adviser Dr Abdul Hafeez Shaikh said current negotiations with the IMF were moving ahead in a positive way for finalising a programme that could provide a platform for macroeconomic development in the country.

The cement sector came under the hammer where Lucky Cement (-4.2%), Cherat Cement (-4.7%), Maple Leaf Cement (-4.8%), DG Khan Cement (-2.7%) and Pioneer Cement (-3.3%) lost value to close in the red zone.

PPL (-3%), Pakistan Oilfields (-2.6%) and OGDC (-1%) from the exploration and production sector fell as prices of crude oil dropped in the international market.

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

Overall, trading volumes increased to 71.4 million shares compared with Friday's tally of 64.3 million. The value of shares traded during the day was Rs3.2 billion.

Shares of 329 companies were traded. At the end of the day, 60 stocks closed higher, 250 declined and 19 remained unchanged.

Maple Leaf Cement was the volume leader with 6.4 million shares, losing Rs1.33 to close at Rs26.49. It was followed by The Bank of Punjab XD with 5.7 million shares, losing Rs0.21 to close at Rs11.92 and Unity Foods with 4.2 million shares, losing Rs0.72 to close at Rs11.74.

Foreign institutional investors were net buyers of Rs630 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.