Market Watch: KSE-100 falls due to fresh lockdown

LONDON:

Bears continued to dominate trading at Pakistan Stock Exchange on Thursday as well, pushing the benchmark index down by 309 points, as imposition of another lockdown in areas of Sindh and Punjab sparked a selling spree at the bourse.

During the session, the rupee depreciation against the US dollar added to investors’ worries and they resorted to profit-booking.

Market participants were also discouraged by the political uncertainty that continued for the second day in a row after Balochistan National Party-Mengal (BNP-M) withdrew from the ruling Pakistan Tehreek-e-Insaf (PTI)-led coalition on Wednesday.

Earlier, trading began with a spike, however, weak investor sentiment and overall pessimism led market participants to offload stocks, which dragged the index down and restrained it from posting gains. A buying spree towards the end of the session helped erase some of the losses.

At close, the benchmark KSE-100 index recorded a decrease of 308.83 points, or 0.91%, to settle at 33,539.85 points.

Arif Habib Limited, in its report, stated that the market shed 377 points during the session and closed down by 309 points.

“Political uncertainty amid emergency lockdown in different parts of the country caused investors to rethink their decisions,” it said. “In addition to that, the rupee dropped to 166.35 against the dollar that showed that the US currency was the preferred store of value for investors compared to equities.”

The vanaspati sector continued to lead the volumes, primarily driven by Unity Foods. A total of 23.9 million shares were traded in the company.

It was followed by the technology sector in terms of traded volumes with 22.9 million shares and banks with 22.2 million.

Among individual stocks, Media Times Limited and The Bank of Punjab followed Unity Foods with 9.9 million and 8.3 million shares changing hands respectively, the report said.

JS Global analyst Danish Ladhani said after touching high and low of +71 points and -377 points respectively, the benchmark KSE-100 index closed negative at 33,540, down 0.9%.

“The market remained under pressure and traded mostly sideways on the back of political jitters after Wednesday’s development when BNP-M announced its withdrawal from the PTI-led alliance over government’s failure to implement accords with the party,” he said.

Individual investors remained on the back foot whereas institutions showed active interest, broadly in sideboard stocks.

Engro (-0.6%), Fauji Fertiliser (-1.3%), Oil and Gas Development Company (-0.6%), Hubco (-2.8%), MCB (-0.5%), Pakistan Petroleum (-1.2%) and Lucky Cement (-0.7%) were among the index movers.

Traded value stood down 36% at $39 million and volumes came in at 216 million shares, down 37%.

Major contribution to the total market volume came from Unity Foods (-3.6%), Media Times Limited (+14.4%), The Bank of Punjab (+0.1%), Jahangir Siddiqui and Company (-5%), Hascol Petroleum (+0.4%) and Maple Leaf Cement (0%).

“Going forward, we expect the market to remain range bound and recommend investors to sell on strength,” the analyst said.

Overall, trading volumes declined to 216.2 million shares compared with Wednesday’s tally of 340.9 million. The value of shares traded during the day was Rs6.5 billion.

Shares of 364 companies were traded. At the end of the day, 97 stocks closed higher, 239 declined and 28 remained unchanged.

Unity Foods was the volume leader with 24 million shares, losing Rs0.43 to close at Rs11.61. It was followed by Media Times with 9.9 million shares, gaining Rs0.21 to close at Rs1.67 and The Bank of Punjab with 8.3 million shares, gaining Rs0.01 to close at Rs8.5.

Foreign institutional investors were net sellers of Rs158.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.