Market watch: KSE-100 slips further as investors resort to profit-taking

Benchmark index decreases 147.39 points to settle at 34,887.64

KARACHI: Following a highly bearish trade at the stock market in the preceding session, the trend continued on Thursday as well as the market plunged further amid macroeconomic concerns.

The KSE-100 index nosedived from the moment trading began, but it managed to stage a quick recovery. The index continued to climb, but the momentum could not be sustained and it once again fell into the negative zone.

A lack of positive triggers also contributed to the dull trading, which pushed the KSE-100 below the significant barrier of 35,000 points.

At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 147.39 points, or 0.42%, to settle at 34,887.64.



JS Global analyst Maaz Mulla said volatility prevailed at the bourse with relatively lower volumes of 78 million shares. "Profit-booking was seen in the market where investors started reducing intra-day positions. Despite mundane activity, the market appeared to consolidate as prices had fallen to highly attractive levels."

On the news front, Pakistan and the International Monetary Fund (IMF) have worked out a financing gap of $10-11 billion for the next financial year 2019-20 as the current account deficit was projected to be curtailed to $8 billion.

"Weak investor sentiments in the banking sector weighed on the index and MCB Bank (-2.9%), HBL (-2.1%), UBL (-1.5%) and NBP (-2%) closed lower. The cement sector moved up on the back of rumours that cement manufacturers had agreed on a new arrangement in which reservations of Fauji Cement had been addressed," Mulla added.

Pioneer Cement (+4.9%), Cherat Cement (+3.9%), DG Khan Cement (+2.9%), Fauji Cement (+3.4%) and Lucky Cement (+1.7%) closed in the green.

"Moving forward, we expect bearish sentiments to persist on the back of political uncertainties and worrying economic indicators. Hence, we recommend investors to remain cautious in trading."

Topline Securities, in its report, stated the KSE-100 extended losses for the second consecutive day in a volatile session, losing 0.42% as there was talk about likely increase in sales tax by 1 percentage point to 18%, increase in interest rate by 100-200 basis points and FED on natural gas as a replacement of GIDC.



"Cement stocks closed positive in anticipation of a possible deal between the manufacturers over production cut amidst a slowdown in economic activity," it said.

Overall, trading volumes decreased to 78.1 million shares compared with Wednesday's tally of 113.2 million. The value of shares traded during the day was Rs3.7 billion.

Shares of 304 companies were traded. At the end of the day, 139 stocks closed higher, 145 declined and 20 remained unchanged.

Maple Leaf Cement was the volume leader with 7.2 million shares, gaining Rs0.81 to close at Rs25.18. It was followed by Sui Northern Gas Pipelines with 4.4 million shares, gaining Rs2.79 to close at Rs71.38 and Lotte Chemical with 3.7 million shares, gaining Rs0.15 to close at Rs15.11.

Foreign institutional investors were net sellers of Rs510.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.