Market watch: Bourse turns bearish, sheds 314 points

Benchmark index decreases 0.96% to settle at 32,401.40

KARACHI: Bears staged a comeback at the bourse on Wednesday as the benchmark KSE-100 index shed 314 points in the absence of any major triggers to drive the market.

In the morning, trading began on a positive note, but selling pressure emerged shortly afterwards and prevailed by the end of the session. Late buying partially wiped off the losses.

According to Ahsan Mehanti of Arif Habib Corp, stocks closed lower amid pressure in the wake of weak earnings announcements in auto and banking sectors.

A lack of institutional support, impact of withdrawal of zero-rated facility for major exporters and higher taxes on cement and auto sectors in the federal budget played the role of catalysts in bearish close of the market, he said.

All index-heavy sectors became the victim of sell-off and remained in the negative zone.

At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 314.48 points, or 0.96%, to settle at 32,401.40.

JS Global analyst Maaz Mulla said negativity prevailed as the KSE-100 index touched an intra-day low of -367 points and closed at 32,401, down 314 points.

"The market will likely remain similar to the previous week until any further development," he pointed out.

On the news front, Prime Minister Imran Khan expressed the desire to establish unconditional bilateral relations between Islamabad and Washington based on mutual trust and friendship.

Nevertheless, trading volumes decreased 13% day-on-day to 84 million shares compared to 97 million shares in the previous session.

Unity Foods (+2%), Maple Leaf Cement (-1.7%) and DG Khan Cement (+3.3%) were the volume leaders, accounting for trading in 22 million shares.

HBL (-1.7%) from the banking sector announced its 2QCY19 results, posting consolidated earnings per share (EPS) of Rs0.45, a decline of 81% year-on-year on the back of hefty costs and losses booked during the quarter. The bank also announced second interim cash dividend of Rs1.25 per share.

From the auto sector, Pak Suzuki Motor Company (-3.8%) declared its 1HCY19 results. The company declared loss after tax of Rs1.5 billion (loss per share of Rs18.53) for the period.

"Moving ahead, we recommend investors to stay cautious and adopt sell-on-strength strategy," the analyst added.

Arif Habib Limited, in its report, stated although the market opened up 10 points and went up 49 points during the session, the index bore heavy selling pressure, sliding 365 points in intra-day trading.

Exploration and production, fertiliser, automobile, cement and banking sectors came under pressure throughout the day.

Financial results of HBL and Sui Northern Gas Pipelines (SNGPL) were announced during the session, whereby SNGPL received a heavy battering in the last half hour and HBL also experienced selling pressure on the announcement of lower-than-anticipated results.

Investor sentiments remained weak as they anticipated poor results from listed companies.

Another important indicator for the market would be the auction of Pakistan Investment Bonds (PIB), where an inverted yield curve was anticipated to lure investors back to equities in the medium term, the report added.

Overall, trading volumes decreased to 84.4 million shares compared with Tuesday's tally of 97.1 million. The value of shares traded during the day was Rs3.37 billion.

Shares of 309 companies were traded. At the end of the day, 98 stocks closed higher, 195 declined and 16 remained unchanged.

Unity Foods was the volume leader with 8.98 million shares, gaining Rs0.19 to close at Rs9.72. It was followed by Maple Leaf Cement with 7.9 million shares, losing Rs0.34 to close at Rs19.78 and DG Khan Cement with 4.7 million shares, gaining Rs1.53 to close at Rs47.82.

Foreign institutional investors were net buyers of Rs704 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.