Market watch: KSE-100 sheds 487 points due to panic selling

Benchmark index falls 1.61% to settle at 29,672.12

KARACHI: The benchmark KSE-100 index extended losses at the stock market on Friday as investors resorted to panic selling in the face of continued tensions between Pakistan and India over Kashmir.

Standard and Poor's affirmation on Pakistan's economy a day earlier provided mid-session support. The ratings agency kept its outlook on Pakistan stable with a 'B-' sovereign rating for the long term and 'B' rating for the short term.

The first trading session began on a positive note but weak investor sentiment resulted in range bound trading and the market inched down marginally by the session's end. The second session extended the losses as the KSE-100 index dipped below 30,000 points to close the week in the red.

At close, the benchmark KSE 100-share Index recorded a decrease of 486.84 points, or 1.61%, to settle at 29,672.12 points.

Arif Habib Limited, in its report, stated the market traded in a narrow band of +/-150 points during the first session and ended the session at -86 points.

"Bearish pressure was carried on in the exploration and production sector from Thursday as the market saw the beginning of the process of appointing financial advisers by the Privatisation Commission for stake sale in Oil and Gas Development Company and Pakistan Petroleum Limited," it said.

Besides, the fertiliser sector, which emerged as the winner due to the resolution of gas infrastructure development cess (GIDC) issue, also came under pressure with significant declines compared to Thursday's close.

Oil and gas marketing, exploration and production, fertiliser and cement sectors experienced selling activity, with the technology sector leading the volumes table with trading in 13.4 million shares, followed by the power sector (12.8 million) and cement companies (11.6 million).

Among individual stocks, K-Electric attracted the most volumes with trading in 10 million shares, followed by WorldCall Telecom (5.3 million) and Maple Leaf Cement (4.7 million).

JS Global analyst Danish Ladhani said equities were negative with the benchmark KSE-100 index shedding 487 points and closing at 29,672.

"The bourse remained weak throughout the session after a brief positive start but it later came under pressure due to the last day of futures rollover week," he said.

The exploration and production sector was the major laggard as worries about a slowdown in global economic growth and its impact on oil demand due to the trade war between the world's two biggest economies kept the global oil market under pressure.

Oil and Gas Development Company (-3.8%), Pakistan Petroleum (-3.9%) and Pakistan Oilfields (-1.5%) remained in the negative zone.

Engro (-2.8%) and Fauji Fertiliser (-2.8%) were major laggards in the fertiliser sector.

Furthermore, mixed sentiment was seen in the financial sector where MCB Bank (+1.7%) got some respite as it closed positive whereas HBL (-1.1%) and UBL (-2.5%) remained in the red.

Traded value stood at $25 million, down 9% and volumes came in at 110 million shares, down 7%. Major contribution to the total market volume came from K-Electric (-5.3%), WorldCall Telecom (-1.3%), Maple Leaf Cement (-5.3%), TRG Pakistan (-6.3%) and Unity Foods (-3.3%).

"Moving ahead, we expect the market to remain negative due to the FATF issue and geopolitical tensions. We see further selling pressure at the bourse," the analyst said.

Overall, trading volumes decreased to 110 million shares compared with Thursday's tally of 118.6 million. The value of shares traded during the day was Rs4 billion.

Shares of 322 companies were traded. At the end of the day, 77 stocks closed higher, 231 declined and 14 remained unchanged.

K-Electric was the volume leader with 10.1 million shares, losing Rs0.17 to close at Rs3.05. It was followed by WorldCall Telecom with 5.4 million shares, losing Rs0.01 to close at Rs0.75 and Maple Leaf Cement with 4.7 million shares, losing Rs0.96 to close at Rs17.19.

Foreign institutional investors were net buyers of Rs302.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.