Market watch: Stocks battered following FATF review meeting

Published: October 21, 2019
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Benchmark index decreases 785.42 points to settle at 33,084.73. PHOTO: REUTERS

Benchmark index decreases 785.42 points to settle at 33,084.73. PHOTO: REUTERS

KARACHI: Stocks took a beating on Monday as the market resumed trading after announcement of Financial Action Task Force (FATF) decision at conclusion of its review meeting on Pakistan’s compliance with the 27-point action plan for curbing money laundering and terror financing.

The Paris-based task force kept Pakistan on the grey list and gave another four months to show significant progress on all the recommendations. Despite expectations of a similar decision, the investors reacted to the development with panic and opted to offload stocks.

The KSE-100 index was off to a bearish start, a trend which continued throughout the session. The mounting selling pressure pushed the index to an intra-day low of 800 points, which recovered briefly before close.

Additionally, the boiling political temperature on the domestic front dampened sentiment as Jamiat Ulema-e-Islam-F (JUI-F) geared up for its march to Islamabad. Skirmishes with India along the border also contributed to the weak sentiment.

At close, the benchmark KSE 100-share Index recorded a decrease of 785.42 points, or 2.32%, to settle at 33,084.73.

JS Global analyst Danish Ladhani said equities nosedived as the benchmark index lost 785 points (-2.3%). “The market came under pressure due to ongoing developments in relation to the planned Azadi March by the opposition and tensions on the Line of Control,” he said.

Exploration and production stocks faced selling pressure, among which Oil and Gas Development Company (-2.3%), Pakistan Petroleum Limited (-2.6%) and Pakistan Oilfields (-1.6%) remained in the negative territory following a fall in international crude oil prices because of growing global demand concerns.

Moreover, in the financial sector, HBL (-2.4%), MCB Bank (-3.2%) and UBL (-1.8%) remained in the red.

In the cement sector, Fauji Cement (-4.9%) announced 1QFY20 earnings per share (EPS) of Rs0.21 vs Rs0.58 in the same period of previous year with no cash dividend. In the fertiliser sector, Engro (-0.8%) and Engro Fertilisers (-1.4%) remained in the negative zone.

“Moving ahead, we expect the market to remain choppy over concerns on the political front,” Ladhani added.

Overall, trading volumes increased to 130.3 million shares compared with Friday’s tally of 115.2 million. The value of shares traded during the day was Rs4.96 billion.

Shares of 351 companies were traded. At the end of the day, 25 stocks closed higher, 313 declined and 13 remained unchanged.

K-Electric was the volume leader with 11.2 million shares, losing Rs0.21 to close at Rs3.68. It was followed by Lotte Chemical with 9.89 million shares, losing Rs0.20 to close at Rs15.93 and The Bank of Punjab with eight million shares, losing Rs0.67 to close at Rs9.12.

Foreign institutional investors were net buyers of Rs165.4 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.

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Reader Comments (1)

  • syed baqar ahsan
    Oct 21, 2019 - 9:15PM

    Stocks are in hands who are playing with sentiments of investors,they know it FATF is another lobby who twisting arm to please India.Recommend

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