Market watch: Bourse turns bearish, KSE-100 loses 527 points

Benchmark index decreases 1.37% to settle at 38,037.68

KARACHI: After a long bull-run, the bourse turned bearish on Wednesday as the KSE-100 index lost 527 points as a mood of melancholy descended on investors ahead of the upcoming monetary policy announcement.

Earlier, market participants had anticipated a reduction in the key policy rate following a decrease in Pakistan Investment Bond (PIB) yields and a slight decline in the inflation reading for October 2019. However, the central bank governor hinted at maintaining the status quo in the monetary policy a couple of days ago, which dampened investor expectations.

Weak investor sentiment sparked selling pressure in all index-heavy sectors, leading to substantial losses. Nevertheless, the index managed to stay above the 38,000-point mark.

After a brief open in the positive, the KSE-100 index started receding as investors began offloading their stock holdings. Occasional gains in the index came but they were wiped out later.

At close, the benchmark KSE 100-share Index recorded a decrease of 526.69 points, or 1.37%, to settle at 38,037.68.

Arif Habib Limited, in its report, stated that after enjoying a bull run that added around 10,000 points to the index, the market finally took a corrective stance with the index plunging over 500 points.

Selling pressure was evident in cement, exploration and production, oil and gas marketing and banking sectors.

"Although the dust is seemingly settling on the political front, investors took cue from the treasury bills auction that saw yields rise and considered it the best opportunity to book profit prior to the announcement of monetary policy on Friday (November 22)," it said. "Street consensus is for status quo (in the monetary policy)."

The index has so far maintained healthy volumes, registering trading in 327 million shares as compared with 385 million in the previous session.

Majority of the volumes were in the technology sector with trading in 50.4 million shares, followed by the engineering sector (38 million) and banks (33 million).

Among individual stocks, WorldCall Telecom led the volumes with 28.3 million shares changing hands, followed by The Bank of Punjab (17.1 million) and Pak Elektron (15.1 million), the report added.

JS Global analyst Maaz Mulla said in line with expectations, profit-booking was witnessed at the bourse and the KSE-100 index largely remained in the red.

"The index touched intra-day high of +97 points and intra-day low of -587 points to close at 38,038, down 527 points," he said.

Major laggards of the index were Engro (-2.1%), Oil and Gas Development Company (-1.8%) and UBL (-2%).

Top volume leaders were WorldCall Telecom, The Bank of Punjab and Pak Elektron, which cumulatively contributed 60 million shares to the total volume.

On the news front, the government approved the country's first-ever National Tariff Policy aimed at removing anomalies in the import duty structure and use it as an instrument to catalyse industrial production and for export growth.

The exploration and production sector remained in the red as crude oil prices edged lower in the international market. In the sector, Pakistan Oilfields (-2.3%), Oil and Gas Development Company (-1.8%) and Pakistan Petroleum (-1.4%) were the major losers.

Profit-booking was witnessed in banking and cement sectors, where HBL (-2.8%), NBP (-3.5%), MCB Bank (-1.9%), UBL (-2%), Fauji Cement (-4.1%), Maple Leaf Cement (-3.4%), DG Khan Cement (-2.1%) and Lucky Cement (-1.7%) were the major losers.

"Moving forward, we expect the market to remain positive, however, we recommend investors to book profit on strength," the analyst said.

Overall, trading volumes decreased to 327.6 million shares compared with Tuesday's tally of 385.3 million. The value of shares traded during the day was Rs11.4 billion.

Shares of 384 companies were traded. At the end of the day, 130 stocks closed higher, 235 declined and 19 remained unchanged.

WorldCall Telecom was the volume leader with 28.3 million shares, gaining Rs0.01 to close at Rs1.59. It was followed by The Bank of Punjab with 17.1 million shares, losing Rs0.33 to close at Rs10.73 and Pak Elektron with 15.1 million shares, gaining Rs0.42 to close at Rs23.51.

Foreign institutional investors were net buyers of Rs511.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.