Market watch: KSE-100 sheds 260 points in volatile trading

Benchmark index decreases 0.83% to settle at 30,971.27

KARACHI: After a day’s respite, the benchmark KSE-100 index once again entered negative territory on Wednesday, shedding 260 points in volatile trading.

A retreat in Asian markets, coupled with falling global crude oil prices, took its toll on Pakistan Stock Exchange (PSX) as investor sentiment weakened.

Furthermore, there was uncertainty among investors ahead of the upcoming meeting of Organisation of the Petroleum Exporting Countries (OPEC) and other producers over the issue of crude oversupply and plunging prices. They also awaited the G20 huddle.

At close, the benchmark KSE-100 index recorded a decrease of 260.28 points, or 0.83%, to settle at 30,971.27.

Arif Habib Limited, in its report, stated that overnight pressure on international crude prices had an impact on the KSE-100 index as well.

“With OPEC+ meeting scheduled for Thursday, followed by a G20 meeting on Friday on the same subject - production cut and management of crude prices, local exploration and production stocks didn’t fell as much as the decline was witnessed in crude prices,” it said.

The report added that the market went in the negative direction for most of the session with the oil and gas chain trading in the red.

“On the other hand, cyclical stocks, which saw positive trading a day ago on the back of partial resumption of economic activities (primarily in Punjab), experienced selling pressure on Wednesday.”

The cement sector, as had been the case for the past several sessions, again topped trading volumes with 42.1 million shares, followed by vanaspati firms (28.8 million) and oil and gas marketing companies (28.4 million).

Stocks that contributed significantly to the volumes included Unity Foods, Hascol Petroleum, Pak Elektron, Maple Leaf Cement and Pioneer Cement, which accounted for 50% of total volumes.

Meanwhile, stocks that contributed positively to the index were MCB (+18 points), IGI Holdings Limited (+9 points), Kohat Cement (+9 points), Kapco (+8 points) and OGDC (+7 points).

Stocks that contributed negatively included Pakistan Tobacco (-36 points), Lucky Cement (-32 points), Bank Alfalah (-29 points), Bank AL Habib (-28 points) and Pakistan Oilfields (-23 points).

JS Global analyst Danish Ladhani said the market opened on a negative note, hitting an intra-day low of -450 points and closed at 30,971, down 0.8%.

“Overall, the market remained bearish with very low volumes and limited participation as lockdowns continue across major cities of Pakistan,” he said.

“On the economic front, Pakistan’s public debt rose 5.14% or Rs1.635 trillion in first eight months of the current fiscal year. Moreover, the rupee dipped to another record low at 167.8 to the US dollar in inter-bank trade.”

In the refinery sector, National Refinery (-0.5%), Pakistan Refinery (-2.2%) and Attock Refinery (-0.7%) closed in the red as the government asked the Oil and Gas Regulatory Authority (Ogra) to take action against oil marketing companies (OMCs) for their reluctance to lift petroleum products from the refineries.

“Going forward, we expect the market to remain range bound as the coronavirus situation prevails across the globe and recommend investors to stay cautious,” the analyst concluded.

Overall, trading volumes increased to 181 million shares compared with Tuesday’s tally of 172.8 million. The value of shares traded during the day was Rs5.9 billion.

Shares of 333 companies were traded. At the end of the day, 115 stocks closed higher, 193 declined and 25 remained unchanged.

Unity Foods was the volume leader with 28.8 million shares, gaining Rs0.70 to close at Rs10.63. It was followed by Hascol Petroleum with 25.8 million shares, gaining Rs0.11 to close at Rs14.96 and Pak Elektron with 14.1 million shares, losing Rs1.31 to close at Rs18.87.

Foreign institutional investors were net sellers of Rs32.26 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.