Market watch: Foreign selling drags KSE-100 down amid political uncertainty

Benchmark index decreases 417.23 points to settle at 37,795.05

KARACHI: Bears returned to the Pakistan stock market on Tuesday as recent announcement of the Supreme Court caused panic among investors, triggering selling pressure in the market.

The KSE-100 index opened on a positive note, however, the index dived following news that the apex court had taken notice of extension in tenure of the chief of army staff.

The index plunged nearly 700 points in intra-day trading before making a slight recovery. However, it failed to cope with the selling pressure as confusion among participants drove the market into the red.

At close, the benchmark KSE 100-share Index recorded a decrease of 417.23 points, or 1.09%, to settle at 37,795.05.

JS Global analyst Maaz Mulla said bulls dominated the early hours at the PSX as the benchmark KSE-100 index touched intra-day high of 355 points.

"However, the index took a sharp turn on the back of news that the Supreme Court of Pakistan had suspended the notification confirming extension for Chief of Army Staff General Qamar Javed Bajwa for another three years after his term expires on November 29," said Mulla.

Profit-booking was witnessed mainly in the cement sector, where DG Khan Cement (-3.5%), Lucky Cement (-2.6%), Pioneer Cement (-2.8%) and Fauji Cement (-2.5%) were the major losers.

Banking, and exploration and production stocks also lost ground amid market pressure where NBP (-3.5%), MCB Bank (-2.5%), The Bank of Punjab (-1.2%), Oil and Gas Development Company (-3.2%) and Pakistan Petroleum Limited (-1.4%) closed lower than their previous day's close.

"Moving ahead, we expect the market to remain choppy due to developments on the political front, therefore, we recommend investors to book profit on strength," the analyst said.

Overall, trading volumes increased to 488.7 million shares compared with Monday's tally of 241.5 million. The value of shares traded during the day was Rs18.4 billion.

Shares of 378 companies were traded. At the end of the day, 133 stocks closed higher, 234 declined and 11 remained unchanged.

Unity Foods was the volume leader with 58.1 million shares, gaining Rs0.85 to close at Rs12.94. It was followed by Fauji Foods with 33.9 million shares, gaining Rs0.72 to close at Rs13.31 and Pak Elektron with 29.6 million shares, gaining Rs0.64 to close at Rs25.27.

Foreign institutional investors were net sellers of Rs1.2 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.