Market watch: Stocks lose further ground as dull trading persists

Benchmark index slips 76.11 points to close at 31,658.12

KARACHI: In line with the trend in the preceding session, the stock market fell further on Tuesday and finished third successive session in the red.

The benchmark KSE-100 index began trading with marginal gains but weak activity dragged the index down. A lack of positive triggers and developments on the political front kept investors mostly on the sidelines. On the other hand, expectations about the inflation data for July also sparked selling pressure.

At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 76.11 points, or 0.24%, to settle at 31,658.12.

According to a Topline Securities' report, the KSE-100 index extended losses as investor sentiment continued to remain weak.

"Despite the government's announcement pertaining to issuance of Pakistan Energy Sukuk-II worth Rs200 billion to curtail circular debt, the independent power producers (IPPs) remained neutral to negative as the International Monetary Fund (IMF) had placed a ceiling on extending government guarantees," it added.

After posting healthy financial results above street consensus, Mari Petroleum recorded an increase of 1.4% in its stock price while National Refinery continued to remain on its downward trajectory after unveiling disappointing results on Monday.

JS Global analyst Maaz Mulla said lacklustre activity prevailed in the market for most part of the day as trading volumes stood low and the benchmark index fluctuated between an intra-day high of 40 points and intra-day low of 248 points.

Banking and cement sectors were major losers of the day where NBP (-2.3%), HBL (-1.1%), UBL (-0.6%), Cherat Cement (-4.8%), Pioneer Cement (-2.6%), Fauji Cement (-4.9%) and Kohat Cement (-2.4%) lost ground. DG Khan Cement, however, rose 0.8%.

"Moving forward, we expect the bearish sentiment to continue on the back of political uncertainties and worrying economic indicators. Moreover, potential redemptions in mutual funds are likely to cause further selling pressure," the analyst said.

"Hence, we recommend investors to remain cautious in trading and adopt sell-on-strength strategy."

Overall, trading volumes increased to 51.3 million shares compared with Monday's tally of 45.8 million. The value of shares traded during the day was Rs2.1 billion.

Shares of 314 companies were traded. At the end of the day, 160 stocks closed higher, 134 declined and 20 remained unchanged.

Maple Leaf Cement was the volume leader with 4.7 million shares, losing Rs0.08 to close at Rs16.94. It was followed by TRG Pakistan with 3.8 million shares, gaining Rs0.32 to close at Rs12.17 and K-Electric with 3.1 million shares, gaining Rs0.03 to close at Rs3.35.

Foreign institutional investors were net buyers of Rs438.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.