Market watch: Stocks lose 101 points on smart lockdown

Benchmark index sheds 0.3% to settle at 33,438.95

Uncertainty continued to rattle Pakistan Stock Exchange on Friday as the benchmark KSE-100 index fell 101 points in a range bound session.

Trading has remained choppy at the stock market for the past few days because of economic and political tensions. A lack of positive triggers coupled with renewed fears of economic slowdown in the face of targeted lockdown in parts of Karachi prevented investors from making fresh buying.

Meanwhile, oil stocks outperformed the market in the wake of a surge in global crude prices following the commitment to supply cuts by the Organisation of Petroleum Exporting Countries (OPEC) and allies in a meeting held on Thursday.

Earlier, the KSE-100 index opened up but a sombre mood of investors prevented it from notching up hefty gains. In the absence of positive triggers, the market looked like a see-saw as it constantly moved between red and green zones till the close of trading.

At close, the benchmark KSE-100 index recorded a decrease of 100.90 points, or 0.30%, to settle at 33,438.95 points.

Arif Habib Limited, in its report, stated that the market remained range bound throughout the session, trading between +160 points and -170 points. It closed down by 101 points. “The re-imposition of lockdown has dimmed prospects of quick economic recovery/stabilisation,” it said.

Furthermore, expectations of rate cut emerged in the early part of the session with the possibility of an emergency meeting of the State Bank of Pakistan anytime next week, which affected investors’ sentiment.

International crude oil prices increased $1 per barrel but oil stocks barely moved, the report added.

FTSE rebalancing also created some excitement but against expectation did not affect the banking sector much. However, brisk buying was made in both MCB Bank and Bank Alfalah.

The banking sector led the volumes with trading in 12.7 million shares, followed by technology firms (10.4 million) and power companies (10.2 million).

Stocks that contributed positively to the index included MCB (+39 points), Bank Alfalah (+13 points), Pakistan Petroleum Limited (+12 points), Pakistan Oilfields (+11 points) and OGDC (+10 points).

Meanwhile, stocks that contributed negatively included Dawood Hercules (-25 points), UBL (-17 points), Lucky Cement (-16 points), Engro Fertilisers (-15 points) and Meezan Bank (-13 points).

JS Global analyst Danish Ladhani said the benchmark KSE-100 index closed negative after hitting high and low of +160 points and -170 points. It ended at 33,439, down 0.3%.

“The market remained dull as a two-week smart lockdown was implemented in various localities of Karachi,” he stated. “Moreover, the market was jittery on the back of political uncertainty as the Pakistan Tehreek-e-Insaf (PTI) began efforts to win back BNP-M’s support.”

Furthermore, HBL (-0.7%), UBL (-1.5%), Fauji Fertiliser Company (-0.2%), Hubco (-0.5%) and Lucky Cement (-1.3%) were the index movers.

Traded value stood very low at $20 million, down 49% and volumes came in at 106 million shares, down 51%.

“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 105.9 million shares compared with Thursday’s tally of 216.2 million. The value of shares traded during the day was Rs3.3 billion.

Shares of 319 companies were traded. At the end of the day, 83 stocks closed higher, 215 declined and 21 remained unchanged.

K-Electric was the volume leader with 9.1 million shares, losing Rs0.07 to close at Rs2.84. It was followed by Unity Foods with 7.3 million shares, losing Rs0.08 to close at Rs11.53 and Bank Alfalah with 5.8 million shares, gaining Rs0.79 to close at Rs33.89.

Foreign institutional investors were net sellers of Rs130.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.