Market watch: KSE-100 loses 102 points amid economic uncertainty

Benchmark index falls 0.25% to settle at 40,175.35

KARACHI: The KSE-100 index lost 102 points in lacklustre trading on Tuesday as economic uncertainty cast a pall over the bourse and restricted investors from taking fresh positions.

Concern about the direction of the economy coupled with speculation over the outcome of Financial Action Task Force (FATF) review meeting kept investors on the sidelines. In addition to those, a lack of positive triggers prevented the market from posting gains.

Earlier, trading kicked off on a positive note and the index climbed past the 40,500-point mark in early hours, however, weak investor sentiment erased the gains by midday. From that point onwards, trading remained dull till the end of the session. Volumes remained thin owing to low investor participation.

At close, the benchmark KSE-100 index recorded a decrease of 101.58 points, or 0.25%, to settle at 40,175.35.

JS Global analyst Danish Ladhani said equities closed on a negative note with the benchmark KSE-100 index shedding 102 points and closing at 40,175.

"The market remained lacklustre with very low volumes during the session due to a lack of clarity on the macroeconomic front," he said.

Pakistan State Oil (PSO) announced 1HFY20 consolidated earnings of Rs11.36 per share vs Rs9.05 per share in the same period of previous year, with no cash dividend.

PSO (-4.9%), Pakistan Petroleum (-1.2%), Bank AL Habib (-0.8%), Lucky Cement (-0.5%) and Bank Alfalah (-1.4%) cumulatively contributed -92 points to the negative close of the index.

Traded value stood very low at $32 million, up 11% and volumes came in at 92 million shares, down 8%.

Major contribution to the total market volume came from Unity Foods (+0.6%), HBL (+1.6%), PSO (-4.9%), Lotte Chemical (-1.5%) and DG Khan Cement (-0.1%).

"Going forward, we expect the market to trade sideways in the short term," the analyst said.

Aba Ali Habib Securities, in its report, stated that the bourse had a lacklustre trading session as the KSE-100 index oscillated between green and red zones, ending the session down by 101.58 points at 40,175.35.

"The volatility in the index was primarily sparked by concern over the ongoing FATF meeting and expected revision in taxes and tariffs in the near term as the IMF has disapproved of the request for putting off the revision," it said.

"Moreover, macroeconomic concerns have also impacted investor sentiment as government's external debt and liabilities surged 12% year-on-year by the end of December 2019 (39.5% of total GDP)."

During the session, the index found support and resistance at 40,065.86 points and 40,600.80 points respectively, the report added.

Overall, trading volumes declined to 91.6 million shares compared with Monday's tally of 99.97 million. The value of shares traded during the day was Rs4.9 billion.

Shares of 334 companies were traded. At the end of the day, 119 stocks closed higher, 192 declined and 23 remained unchanged.

Unity Foods was the volume leader with 13.4 million shares, gaining Rs0.08 to close at Rs13.9. It was followed by Habib Bank with 5.4 million shares, gaining Rs2.78 to close at Rs171.78 and PSO with 4.6 million shares, losing Rs9.42 to close at Rs182.3.

Foreign institutional investors were net buyers of Rs103.4 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.