Market watch: KSE-100 extends losses, sheds 293 points

Benchmark index decreases 0.75% to close at 38,906.40

KARACHI: The bear-run continued at Pakistan Stock Exchange on Wednesday as the benchmark KSE-100 index fell 293 points, pulled down by investor concern over outflow of foreign hot money and uncertainty in global equity markets.

However, upbeat data of cement sales lent support to stocks of the cement sector. According to statistics released by the All Pakistan Cement Manufacturers Association (Apcma), cement sales grew 33.9% year-on-year to 4.49 million tons in February.

Earlier, stock trading began with a steep drop but market participants later resorted to cherry-picking, erasing the losses and taking the index in the positive territory. The advance, however, proved short-lived on investors' concern over the national economy that triggered a selling spree, which continued till the end of the session.

At close, the benchmark KSE-100 index recorded a decrease of 293.28 points, or 0.75%, to settle at 38,906.40.

Arif Habib Limited, in its report, stated that the market continued to slide with another loss of 437 points during the session. By the close of trading, the index recovered somewhat but ended down by 293 points.

"Other than cement and steel sectors, all other sectors sustained losses," it said. "News related to the Naya Pakistan Housing Scheme, higher Public Sector Development Programme (PSDP) utilisation and indication of relaxation in fiscal targets by the International Monetary Fund (IMF) kept investors' interest alive."

Market participants preferred cyclical stocks over index heavyweights like HBL, UBL, Engro, Hubco, Fauji Fertiliser, Oil and Gas Development Company and Pakistan Petroleum.

The oil and gas chain disregarded the hike in international crude prices and drew muted interest from investors.

The cement sector remained in the limelight with trading in 71.3 million shares, followed by banks (23.1 million) and oil and gas marketing companies (21.7 million).

Among individual stocks, Maple Leaf Cement registered a trading volume of 23.4 million shares, followed by Hascol Petroleum (19.2 million) and The Bank of Punjab (15.9 million), the report added.

JS Global analyst Maaz Mulla said another weak trading session was witnessed at the bourse where the KSE-100 index closed at 38,906, down 293 points.

"Such bearish sentiment can be attributed to the ongoing impact of coronavirus on international markets," he said. "The KSE-100 index touched intra-day high of +63 points and intra-day low of -437 points."

Traded volumes were down by 17% to 187 million shares while traded value decreased by 16% to $48 million.

On the news front, State Bank of Pakistan Governor Reza Baqir hinted that the bank may consider slashing the policy rate following a decline in inflation reading.

Moreover, a rally continued in the cement sector where Kohat Cement (+6.8%), Pioneer Cement (+5.3%), Cherat Cement (+2.9%), Fauji Cement (+2.4%), Maple Leaf Cement (+0.8%) and DG Khan Cement (+0.9%) were major movers of the day.

Selling pressure was noted in the exploration and production sector where Pakistan Petroleum (-1.9%), Pakistan Oilfields (-1.8%) and Oil and Gas Development Company (-2.4%) closed in the red as crude oil prices had edged lower in recent days in the international market.

"Moving ahead, we recommend any major dips in the market should be taken as an opportunity to accumulate value stocks," the analyst added.

Overall, trading volumes decreased to 187 million shares compared with Tuesday's tally of 225.3 million. The value of shares traded during the day was Rs7.4 billion.

Shares of 347 companies were traded. At the end of the day, 118 stocks closed higher, 211 declined and 18 remained unchanged.

Maple Leaf Cement was the volume leader with 23.4 million shares, gaining Rs0.21 to close at Rs26.61. It was followed by Hascol Petroleum with 19.2 million shares, losing Rs0.21 to close at Rs20.52 and The Bank of Punjab with 15.9 million shares, losing Rs0.12 to close at Rs11.48.

Foreign institutional investors were net sellers of Rs586 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.