Market watch: KSE-100 dips further amid political, economic fears

Benchmark index decreases 212.18 points to close at 40,243.26

KARACHI: The stock market extended its losses on Friday as the benchmark index shed over 200 points amid thin trading because of concern over political and economic uncertainty.

Earlier, trading began on a positive note but the market could not sustain the momentum and soon dived into the red zone. Near close, the market made some recovery following news of issuance of Sukuk-II for reducing the circular debt.

Moreover, announcement of financial results by Lotte Chemical raised concern about product margins and forced investors to make more selling.

Among economic indicators, Pakistan's economic growth is expected to slow down in the current fiscal year and exports have remained almost stagnant. Apart from these, inflation is on the rise.

Moreover, political tussle over NAB cases against opposition leaders and calls for fresh elections also had an impact on the stock market.

At close, the benchmark KSE-100 index recorded a decrease of 212.18 points, or 0.52%, to settle at 40,243.26. A day ago, the market had lost 75 points.

Arif Habib Limited, in its report, stated that the market opened on a positive note with a gain of 139 points but closed in the red.

During the two sessions of the day, the index lost 361 points in total but in the last hour of trading the market recovered somewhat with Pakistan State Oil (PSO) showing some life in the wake of news about Sukuk-II float.

"Selling activity was noted across the board barring a few stocks in the banking sector. Lotte Chemical announced relatively better results, however, concern over product margins pushed investors to sell positions," it said.

"The transport sector led the volumes with trading in 19 million shares, followed by chemical stocks (15.3 million) and technology firms (13.4 million)."

Among individual stocks, Pakistan International Bulk Terminal recorded trading in 17.5 million shares, followed by Lotte Chemical (13.1 million) and Hascol (9.1 million).

JS Global analyst Danish Ladhani said equities closed on a negative note with the benchmark KSE-100 index losing 212 points.

"The market remained lacklustre in today's trading session with value buying seen ahead of major corporate results," he said. "Furthermore, the market remained jittery due to the increased cut-off yield of T-bills."

Average daily traded value stood low at $24 million, down 47% and volumes came in at 118 million, down 40%.

Major contribution to the total market volume came from Pakistan International Bulk Terminal (+1.2%), Lotte Chemical (-4.2%), Hascol (-2.8%), Avanceon Limited (-4.7%), Unity Foods (-1.7%) and The Bank of Punjab (-1.5%).

"Going forward, we expect the market to trade sideways in the short term on the back of political uncertainty and FATF (Financial Action Task Force) review session this month," Ladhani concluded.

Stocks that contributed positively to the KSE-100 index included HBL (+48 points), MCB (+24 points), Meezan Bank (+14 points), IGI Holdings (+9 points) and National Foods (+4 points).

Meanwhile, stocks that contributed negatively to the index were Pakistan Tobacco (-38 points), Dawood Hercules (-30 points), Pakistan Oilfields (-20 points), Engro (-19 points) and Oil and Gas Development Company (-14 points).

Overall, trading volumes declined to 117.6 million shares compared with Thursday's tally of 197.4 million. The value of shares traded during the day was Rs3.8 billion.

Shares of 326 companies were traded. At the end of the day, 95 stocks closed higher, 211 declined and 20 remained unchanged.

Pakistan International Bulk Terminal was the volume leader with 17.5 million shares, gaining Rs0.13 to close at Rs11.23. It was followed by Lotte Chemical with 13.1 million shares, declining Rs0.6 to close at Rs13.78 and Hascol Petroleum with 9.1 million shares, losing Rs0.65 to close at Rs22.31.

Foreign institutional investors were net sellers of Rs82.14 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.