Market watch: KSE-100 declines 214 points owing to political uncertainty

Benchmark index decreases 0.5% to settle at 42,993.02

KARACHI: The stock market extended its losses on Wednesday as the benchmark KSE-100 index shed 214 points because of a lack of positive triggers.

Rising political noise, emerging from Pakistan Tehreek-e-Insaf (PTI) allies disapproving of the government's policies, also contributed to the decline. Disagreements between the PTI government and allies were taken as a sign of a brewing political crisis.

After a brief open in the positive, the KSE-100 index began declining. Selling pressure gained pace after midday and profit-booking persisted throughout the day. Cherry-picking was witnessed towards the end of the session, which wiped off some of the losses.

At close, the benchmark KSE 100-share Index recorded a decrease of 214.02 points, or 0.5%, to settle at 42,993.02.

A report of Arif Habib Limited stated that political uncertainty took control of investor sentiment on Wednesday.

"PTI allies are one by one showing disapproval of government policies, which is hinting at a crisis in the making that forced investors to be safe rather than sorry," it said.

"Investors kept booking profit at current levels, which exerted pressure on the oil and gas chain (oil marketing companies, exploration and production firms and refineries)."

The banking sector also remained slow whereas the cement sector saw some buying interest, which helped stock prices to remain on the higher side.

Overall, the cement sector led the volumes with trading in 34.4 million shares, followed by banks (32.9 million) and technology firms (16.2 million).

Among individual stocks, The Bank of Punjab led the volumes with 19.6 million shares changing hands, followed by Maple Leaf Cement (18.2 million) and TRG Pakistan (9.2 million), the report added.

Topline Securities, in its report, stated that lacklustre activity was witnessed at the bourse.

"Feroze 1888 Mills Limited closed at its upper lock for the second consecutive session after expectation of large orders received by the towel manufacturing companies at the Heimtextil trade fair," the report pointed out.

"The main negative contributor to the index was Hubco, which dragged the index down by 35 points, followed by Pakistan Petroleum (-27 points), Pakistan Services Limited (-23 points) and Dawood Hercules (-14 points)."

Investor participation in terms of volume was down 31% day-on-day at 171 million shares. Traded value was down 22% day-on-day at Rs6.1 billion, the report said.

Overall, trading volumes fell to 171.3 million shares compared with Tuesday's tally of 249.7 million. The value of shares traded during the day was Rs6.1 billion.

Shares of 364 companies were traded. At the end of the day, 120 stocks closed higher, 224 declined and 20 remained unchanged.

The Bank of Punjab was the volume leader with 19.7 million shares, gaining Rs0.12 to close at Rs13.5. It was followed by Maple Leaf Cement with 18.3 million shares, gaining Rs0.4 to close at Rs23.24 and TRG Pakistan with 9.3 million shares, gaining Rs0.1 to close at Rs28.42.

Foreign institutional investors were net buyers of Rs343 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.