Market watch: KSE-100 falls 400 points over unchanged monetary policy
Benchmark index decreases 0.95% to settle at 41,898.70
Benchmark index decreases 0.95% to settle at 41,898.70. PHOTO: REUTERS
KARACHI:
The benchmark KSE-100 index extended losses on Wednesday and closed down 400 points as the much-awaited monetary policy announcement, which came on Tuesday evening, failed to enthuse market participants.
The State Bank of Pakistan (SBP) left the benchmark interest rate unchanged at 13.25% for the next two months, which meant bank financing would remain expensive for the businesses. SBP Governor Reza Baqir cited high inflation as the reason for not slashing the interest rate.
Although the announcement was well in line with market expectations, industrialists expressed dismay, insisting that the eight-year high interest rate was detrimental to the business activities and expansion plans.
However, institutional interest in selected stocks of the textile sector lent support to the bourse following central bank's announcement of Rs200 billion worth of additional concessionary financing under the Export Finance Scheme (EFS) and Long-Term Financing Facility (LTFF).
Earlier, trading began on a positive note, however, weak investor sentiment, in the wake of pessimism over the status quo in the monetary policy, sparked selling and investors offloaded stocks, leading to a steady decline in the index throughout the day.
The selling pressure intensified towards the end of the session, thus extending the losses and pushing the KSE-100 index below 42,000 points.
At close, the benchmark KSE-100 index recorded a decrease of 400.49 points, or 0.95%, to settle at 41,898.70.
In its report, Arif Habib Limited stated that following Tuesday's slide, the market went down by another 508 points (unadjusted).
"The SBP's decision of not cutting the rate at this stage caused concern amongst investors and sparked profit-booking in cement and steel sectors," it said. "To the contrary, exploration and production, and oil marketing companies performed relatively better on the back of a slight improvement in international crude oil prices."
At the start of trading, the market saw Fauji Fertiliser Bin Qasim (FFBL) announce financial results, which were poorer than anticipation and pushed its share price to the lower circuit.
The technology sector topped the trading volume with 34.3 million shares, followed by cement companies (26.1 million) and banks (23.9 million), the report added.
JS Global analyst Maaz Mulla said the PSX moved in both directions, touching intra-day high of +130 points and sliding to a low of -508 points, before closing the day at 41,899, down 400 points.
Major movers of the day were HBL (-2.3%), MCB Bank (-2.2%), UBL (-1.6%), Engro (-1.1%), Hubco (-1.1%), Lucky Cement (-2.7%) and Dawood Hercules (-1.7%). Volumes increased 4% day-on-day to 197 million shares.
"Moreover, selling pressure was witnessed in the cement sector, where Maple Leaf Cement (-3%), Cherat Cement (-2.4%), Pioneer Cement (-2.4%), Lucky Cement (-2.7%) and Fauji Cement (-2.2%) were the major losers," he said.
Fauji Fertiliser Bin Qasim (-3.4%) declared its 2019 result, where the company recorded loss per share of Rs6.34.
Bank AL Habib (+0.7%) from the banking sector declared its calender year 2019 result, posting earnings per share of Rs10.05 and cash payout of Rs3.50 per share.
"Moving forward, we recommend investors to stay cautious and accumulate value stocks on further dips," the analyst said.
Overall, trading volumes increased to 197.1 million shares compared with Tuesday's tally of 189 million. The value of shares traded during the day was Rs7.4 billion.
Shares of 353 companies were traded. At the end of the day, 106 stocks closed higher, 236 declined and 11 remained unchanged.
WorldCall Telecom was the volume leader with 22.7 million shares, losing Rs0.07 to close at Rs1.09. It was followed by Hascol Petroleum with 17.9 million shares, losing Rs0.52 to close at Rs24.95 and Maple Leaf Cement with 10.9 million shares, losing Rs0.81 to close at Rs24.18.
Foreign institutional investors were net sellers of Rs57.9 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
The benchmark KSE-100 index extended losses on Wednesday and closed down 400 points as the much-awaited monetary policy announcement, which came on Tuesday evening, failed to enthuse market participants.
The State Bank of Pakistan (SBP) left the benchmark interest rate unchanged at 13.25% for the next two months, which meant bank financing would remain expensive for the businesses. SBP Governor Reza Baqir cited high inflation as the reason for not slashing the interest rate.
Although the announcement was well in line with market expectations, industrialists expressed dismay, insisting that the eight-year high interest rate was detrimental to the business activities and expansion plans.
However, institutional interest in selected stocks of the textile sector lent support to the bourse following central bank's announcement of Rs200 billion worth of additional concessionary financing under the Export Finance Scheme (EFS) and Long-Term Financing Facility (LTFF).
Earlier, trading began on a positive note, however, weak investor sentiment, in the wake of pessimism over the status quo in the monetary policy, sparked selling and investors offloaded stocks, leading to a steady decline in the index throughout the day.
The selling pressure intensified towards the end of the session, thus extending the losses and pushing the KSE-100 index below 42,000 points.
At close, the benchmark KSE-100 index recorded a decrease of 400.49 points, or 0.95%, to settle at 41,898.70.
In its report, Arif Habib Limited stated that following Tuesday's slide, the market went down by another 508 points (unadjusted).
"The SBP's decision of not cutting the rate at this stage caused concern amongst investors and sparked profit-booking in cement and steel sectors," it said. "To the contrary, exploration and production, and oil marketing companies performed relatively better on the back of a slight improvement in international crude oil prices."
At the start of trading, the market saw Fauji Fertiliser Bin Qasim (FFBL) announce financial results, which were poorer than anticipation and pushed its share price to the lower circuit.
The technology sector topped the trading volume with 34.3 million shares, followed by cement companies (26.1 million) and banks (23.9 million), the report added.
JS Global analyst Maaz Mulla said the PSX moved in both directions, touching intra-day high of +130 points and sliding to a low of -508 points, before closing the day at 41,899, down 400 points.
Major movers of the day were HBL (-2.3%), MCB Bank (-2.2%), UBL (-1.6%), Engro (-1.1%), Hubco (-1.1%), Lucky Cement (-2.7%) and Dawood Hercules (-1.7%). Volumes increased 4% day-on-day to 197 million shares.
"Moreover, selling pressure was witnessed in the cement sector, where Maple Leaf Cement (-3%), Cherat Cement (-2.4%), Pioneer Cement (-2.4%), Lucky Cement (-2.7%) and Fauji Cement (-2.2%) were the major losers," he said.
Fauji Fertiliser Bin Qasim (-3.4%) declared its 2019 result, where the company recorded loss per share of Rs6.34.
Bank AL Habib (+0.7%) from the banking sector declared its calender year 2019 result, posting earnings per share of Rs10.05 and cash payout of Rs3.50 per share.
"Moving forward, we recommend investors to stay cautious and accumulate value stocks on further dips," the analyst said.
Overall, trading volumes increased to 197.1 million shares compared with Tuesday's tally of 189 million. The value of shares traded during the day was Rs7.4 billion.
Shares of 353 companies were traded. At the end of the day, 106 stocks closed higher, 236 declined and 11 remained unchanged.
WorldCall Telecom was the volume leader with 22.7 million shares, losing Rs0.07 to close at Rs1.09. It was followed by Hascol Petroleum with 17.9 million shares, losing Rs0.52 to close at Rs24.95 and Maple Leaf Cement with 10.9 million shares, losing Rs0.81 to close at Rs24.18.
Foreign institutional investors were net sellers of Rs57.9 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.