Market watch: Pre-budget uncertainty sparks bearish trading
Benchmark index drops 141.19 points to settle at 33,695.42
Benchmark index drops 141.19 points to settle at 33,695.42. PHOTO: REUTERS
KARACHI:
Bearish trading continued at Pakistan Stock Exchange on Thursday as budget uncertainty weighed on investor sentiment that led to a decline of 141 points in the benchmark index.
Market participants speculated about the upcoming budget announcement for fiscal year 2020-21, which seemed quite a challenge for the government.
Termed the “Corona Budget”, it may provide relief for the ordinary people, however, the tax collection target has been set at a massive Rs5.1 trillion, according to Adviser to Prime Minister on Finance Abdul Hafeez Shaikh.
Investor sentiment remained weak throughout the day due to absence of positive triggers.
Earlier, trading began on a bearish note and the market remained in the negative territory throughout the day. Investors resorted to profit booking in the face of looming uncertainty.
At close, the benchmark KSE-100 index recorded a decrease of 141.19 points, or 0.42%, to settle at 33,695.42.
JS Global analyst Maaz Mulla said profit-booking was witnessed at the bourse as the KSE-100 index largely remained in the red zone.
“Such activity can be attributed to the first day of futures rollover,” he said. “The index touched intra-day low of -238 points and closed at 33,695.”
Top volume leaders were TRG Pakistan, Unity Foods and Hascol Petroleum and they cumulatively contributed 70 million shares to the total volumes.
On the news front, the World Bank approved a $500 million worth of loan programme to boost Pakistan’s pandemic emergency response and protect human capital investment in the country.
Moreover, PM Aide Abdul Hafeez Shaikh said the government was preparing the “Corona Budget” and trying to provide maximum relief for people in the upcoming budget.
Technology stocks experienced investor interest where TRG Pakistan (+7.5%), Avanceon (+7.5%) and NetSol Technologies (+7.5%) hit their respective upper circuit.
Pakistan Petroleum (-2%), Oil and Gas Development Company (-1.8%) and Pakistan Oilfields (-1.3%) from the exploration and production sector were in the red zone despite an increase in crude oil prices in the international market.
The banking sector also remained in the red territory where HBL (-1.6%), UBL (-2.6%), Bank Alfalah (-2.8%), Bank AL Habib (-0.9%) and MCB (-0.4%) were the major losers.
“Moving forward, we expect the market to remain volatile as pressure is likely to persist due to the rollover week while the consolidation phase may continue,” the analyst said.
Arif Habib Limited, in its report, stated that the market opened on a negative note and maintained the downtrend, recording a loss of 238 points during the session and closing down by 141 points.
International crude prices slipped overnight to trade near $31.5 per barrel, which was approximately 4% down from the level seen last Thursday before the stock market closed for a long weekend.
“Cement and banking sectors remained under pressure throughout the session for a lack of clear positive triggers,” it said.
Off-board stocks such as TRG Pakistan, Unity Foods, Pak Elektron and Hum Network remained in the limelight, in addition to the pharmaceutical sector (primarily Searle and GlaxoSmithKline), which had consistently displayed a good performance on the back expectations about the Covid-19 cure.
The technology sector led the volumes with trading in 36.9 million shares, followed by oil and gas marketing companies (28.8 million) and vanaspati firms (21.2 million), the report added.
Overall, trading volumes increased to 194.7 million shares compared with last Thursday’s tally of 147.2 million. The value of shares traded during the day was Rs7.3 billion.
Shares of 335 companies were traded. At the end of the day, 148 stocks closed higher, 162 declined and 25 remained unchanged.
TRG Pakistan was the volume leader with 24.8 million shares, gaining Rs1.93 to close at Rs27.68. It was followed by Hascol Petroleum with 24.4 million shares, gaining Rs0.23 to close at Rs14.71 and Unity Foods with 21.2 million shares, gaining Re1 to close at Rs13.28.
Foreign institutional investors were net sellers of Rs469.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
Bearish trading continued at Pakistan Stock Exchange on Thursday as budget uncertainty weighed on investor sentiment that led to a decline of 141 points in the benchmark index.
Market participants speculated about the upcoming budget announcement for fiscal year 2020-21, which seemed quite a challenge for the government.
Termed the “Corona Budget”, it may provide relief for the ordinary people, however, the tax collection target has been set at a massive Rs5.1 trillion, according to Adviser to Prime Minister on Finance Abdul Hafeez Shaikh.
Investor sentiment remained weak throughout the day due to absence of positive triggers.
Earlier, trading began on a bearish note and the market remained in the negative territory throughout the day. Investors resorted to profit booking in the face of looming uncertainty.
At close, the benchmark KSE-100 index recorded a decrease of 141.19 points, or 0.42%, to settle at 33,695.42.
JS Global analyst Maaz Mulla said profit-booking was witnessed at the bourse as the KSE-100 index largely remained in the red zone.
“Such activity can be attributed to the first day of futures rollover,” he said. “The index touched intra-day low of -238 points and closed at 33,695.”
Top volume leaders were TRG Pakistan, Unity Foods and Hascol Petroleum and they cumulatively contributed 70 million shares to the total volumes.
On the news front, the World Bank approved a $500 million worth of loan programme to boost Pakistan’s pandemic emergency response and protect human capital investment in the country.
Moreover, PM Aide Abdul Hafeez Shaikh said the government was preparing the “Corona Budget” and trying to provide maximum relief for people in the upcoming budget.
Technology stocks experienced investor interest where TRG Pakistan (+7.5%), Avanceon (+7.5%) and NetSol Technologies (+7.5%) hit their respective upper circuit.
Pakistan Petroleum (-2%), Oil and Gas Development Company (-1.8%) and Pakistan Oilfields (-1.3%) from the exploration and production sector were in the red zone despite an increase in crude oil prices in the international market.
The banking sector also remained in the red territory where HBL (-1.6%), UBL (-2.6%), Bank Alfalah (-2.8%), Bank AL Habib (-0.9%) and MCB (-0.4%) were the major losers.
“Moving forward, we expect the market to remain volatile as pressure is likely to persist due to the rollover week while the consolidation phase may continue,” the analyst said.
Arif Habib Limited, in its report, stated that the market opened on a negative note and maintained the downtrend, recording a loss of 238 points during the session and closing down by 141 points.
International crude prices slipped overnight to trade near $31.5 per barrel, which was approximately 4% down from the level seen last Thursday before the stock market closed for a long weekend.
“Cement and banking sectors remained under pressure throughout the session for a lack of clear positive triggers,” it said.
Off-board stocks such as TRG Pakistan, Unity Foods, Pak Elektron and Hum Network remained in the limelight, in addition to the pharmaceutical sector (primarily Searle and GlaxoSmithKline), which had consistently displayed a good performance on the back expectations about the Covid-19 cure.
The technology sector led the volumes with trading in 36.9 million shares, followed by oil and gas marketing companies (28.8 million) and vanaspati firms (21.2 million), the report added.
Overall, trading volumes increased to 194.7 million shares compared with last Thursday’s tally of 147.2 million. The value of shares traded during the day was Rs7.3 billion.
Shares of 335 companies were traded. At the end of the day, 148 stocks closed higher, 162 declined and 25 remained unchanged.
TRG Pakistan was the volume leader with 24.8 million shares, gaining Rs1.93 to close at Rs27.68. It was followed by Hascol Petroleum with 24.4 million shares, gaining Rs0.23 to close at Rs14.71 and Unity Foods with 21.2 million shares, gaining Re1 to close at Rs13.28.
Foreign institutional investors were net sellers of Rs469.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.