KARACHI: Bears held their ground at the stock market on Thursday and made the benchmark index shed 424 points because of looming economic uncertainty coupled with concern over the MSCI review, due on May 12.
The market remained preoccupied with the fear of Pakistan slipping into the frontier market index from the emerging market category in the MSCI review. The pessimism triggered selling pressure, which persisted throughout the day, and market participants resorted to profit-booking.
Weak investor sentiment caused trading to start with a dip but still the market managed to rise multiple times till midday. However, the sombre mood combined with looming economic uncertainty restricted the market from posting any significant gains and the KSE-100 index closed slightly above the 33,300-point mark.
At close, the benchmark KSE-100 index recorded a decrease of 424.02 points, or 1.26%, to settle at 33,304.16.
Arif Habib Limited, in its report, stated that the market opened on a negative note and could manage to pull back into the green zone for a brief period before plunging due to selling pressure.
“Regardless of where the international crude prices were trading at, local exploration and production and oil and gas marketing companies, which responded positively to the ascend in international crude prices last week, remained oblivious to further price gains,” it said.
“Profit-booking is clearly on investors’ mind, who have so far been focusing on fertiliser, cement, exploration and production and oil and gas marketing companies.”
Banks, on the other hand, which had faced the outflow of foreign investment (possibly due to MSCI rebalancing), showed initial signs of recovery on expectation of maintaining the status quo in the upcoming monetary policy announcement.
It was reflected in the change in yield in the secondary market for 10-year Pakistan Investment Bonds (PIBs), which marked a low of 7.64% on April 17, 2020 but recovered to 8.23% by Thursday, indicating that the central bank may maintain the status quo in the monetary policy.
The cement sector led the volumes with trading in 41.8 million shares, followed by banks (19.1 million) and oil and gas marketing companies (18.9 million).
JS Global analyst Maaz Mulla said Pakistan equities closed negative as the KSE-100 index ended at 33,304, shedding 424 points compared to its previous close.
During the session, the traded value increased 4% day-on-day to $47 million while the traded volumes dipped 16% to 176 million shares.
Hascol Petroleum (-4.9%), Maple Leaf Cement (-2.1%) and DG Khan Cement (-2.6%) were major contributors to the volumes.
Major decliners were Oil and Gas Development Company (-3.2%), Pakistan Petroleum (-3.4%), Hubco (-2.5%), Lucky Cement (-2.5%), Bank AL Habib (-3%) and Pakistan Oilfields (-2.7%).
In the banking sector, investors’ interest was witnessed in HBL (+1.5%), UBL (+1.1%) and Bank Alfalah (+0.2%), which closed higher than their previous day’s close.
“Moving forward, we expect the market to trade sideways as the consolidation phase continues. However, investors should take the opportunity to accumulate stocks as the medium to long-term trend remains bullish,” the analyst said.
Overall, trading volumes fell to 176 million shares compared with Wednesday’s tally of 208.9 million. The value of shares traded during the day was Rs7.5 billion.
Shares of 331 companies were traded. At the end of the day, 75 stocks closed higher, 243 declined and 13 remained unchanged.
Hascol Petroleum was the volume leader with 16.1 million shares, losing Rs0.76 to close at Rs14.9. It was followed by Maple Leaf Cement with 12.6 million shares, losing Rs0.54 to close at Rs25.78 and DG Khan Cement with 8.2 million shares, losing Rs2.09 to close at Rs78.72.
Foreign institutional investors were net sellers of Rs630.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.