Market watch: KSE-100 dips further as selling pressure weighs on sentiment

Benchmark index decreases 232.43 points to close at 40,249.22

KARACHI: The benchmark KSE-100 index continued to lose ground for the second consecutive session on Friday in the wake of foreign fund outflows and rising concern over economic uncertainty.

Moreover, the announcement of financial results in the fertiliser, oil and banking sectors sparked worries and panic selling by investors.

Some stocks came under pressure as the market kept waiting for the official version of the Financial Action Task Force's (FATF) plenary session.

At close, the benchmark KSE-100 index recorded a decrease of 232.43 points, or 0.57%, to settle at 40,249.22.

Arif Habib Limited, in its report, stated that the market faced selling pressure and saw a decline of 311 points during the day. The market awaited till close the release of a statement following the FATF plenary session, but it merely got some positive hints.

However, exploration and production, refinery, oil marketing, steel and fertiliser stocks bore the selling pressure.

"Mughal Iron and Steel announced its financial results, which showed a significant tax reversal that caused investors to stay cautious and sell the stock, which brought the price down in the closing half hour," Arif Habib Limited said.

"Trading activity in the banking sector remained muted. The cement sector led the volumes with trading in 19.6 million shares, followed by food companies (9.8 million) and power firms (9.1 million)."

Stocks that contributed significantly to the volumes included Maple Leaf Cement, Kot Addu Power Company, Fauji Foods, Unity Foods and DG Khan Cement, which accounted for 36% of the total volumes.

Sectors that contributed to the market performance included fertiliser (-92 points), banks (-64 points), exploration and production (-49 points), investment banks (-35 points) and cement (+21 points).

Stocks that contributed positively included Hubco (+24 points), Lucky Cement (+18 points), Shifa International Hospitals (+8 points), Habib Metropolitan Bank (+7 points) and Philip Morris Pakistan Limited (+6 points).

Meanwhile, stocks that contributed negatively included Engro (-66 points), MCB Bank (-44 points), Dawood Hercules (-34 points), OGDC (-31 points) and HBL (-24 points).

JS Global analyst Danish Ladhani said equities closed the week on a negative note with the benchmark index shedding 232 points.

"Trading remained lacklustre in the absence of any major triggers. Engro (-2.8%) was the major laggard as the company announced consolidated CY19 earnings per share (EPS) of Rs28.69 vs Rs22.06 in the previous year with a dividend of Re1," he said.

Traded value stood very low at $23 million, down 24% and volumes came in at 86 million shares, down 24%.

"Going forward, we expect the market to trade sideways in the short term on the back of macroeconomic uncertainty," Ladhani concluded.

Overall, trading volumes declined to 85.6 million shares compared with Thursday's tally of 112.1 million. The value of shares traded during the day was Rs3.6 billion.

Shares of 326 companies were traded. At the end of the day, 131 stocks closed higher, 172 declined and 23 remained unchanged.

Maple Leaf Cement was the volume leader with 8.1 million shares, gaining Rs0.30 to close at Rs23.67. It was followed by Kot Addu Power Company with 7.5 million shares, increasing Rs0.36 to close at Rs26.78 and Fauji Foods with 5.9 million shares, gaining Rs0.27 to close at Rs11.84.

Foreign institutional investors were net sellers of Rs241.41 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.