Market watch: Bears dominate as political tensions take toll

Benchmark KSE-100 index slips 114.93 points to settle at 39,914.76

KARACHI:

Bears maintained their control over the Pakistan Stock Exchange (PSX) on Monday as political tensions fuelled selling pressure in index-heavy sectors.

The KSE-100 index opened on a positive note with investors seemingly cheering Moody’s stable outlook for Pakistan.

Moody’s Investors Service – one of the top three global credit rating agencies – concluded its three-month-long consideration for a possible rating downgrade and reposed confidence in Pakistan’s economy.

The global agency reaffirmed a stable outlook for Pakistan, compared to its earlier stance when it put the country “under review for downgrade”.

The development sparked interest at the bourse, however, the optimism was short-lived as selling in tech, cement, banking and exploration and production (E&P) stocks dragged the index into the red.

Shares took a battering in the wake of political worries following remarks from the foreign minister about the Organisation of Islamic Cooperation (OIC) and Kashmir.

At close, the benchmark KSE-100 index recorded a decrease of 114.93 points, or 0.29%, to settle at 39,914.76 points.

Arif Habib Limited, in its report, stated, “The market experienced selling pressure due to selling activity in cement, steel, E&P and banking stocks. Oil marketing and refinery sectors performed well, where Attock Refinery and Hascol Petroleum hit their upper circuits and National Refinery traded near its upper circuit.”

Though international crude prices were positive, local E&P companies saw selling pressure due to foreign selling. Technology stocks took a breather, which were otherwise rallying consistently, and saw TRG hit its lower circuit on the back of post-IPO listing of its related party Ibex, it added.

Sectors contributing to the performance included oil and gas marketing (+31 points), power (+28 points), textile (+25 points), refinery (+13 points), technology (-48 points), cement (-45 points), E&P (-40 points), banks (-24 points) and insurance (-24 points).

JG Global analyst Danish Ladhani said, “The market remained dull with E&P stocks being the major laggards where OGDC (-0.8%), Pakistan Oilfields (-1.3%) and Pakistan Petroleum Limited (-0.8%) closed in the red.”

Mixed sentiment was seen in the financial sector where MCB (-1.1%) and UBL (-0.8%) remained in the negative zone.

Profit-taking was witnessed in the cement sector where Power Cement (-6.5%), Pioneer Cement (-3.2%) and Cherat Cement (-4.1%) were in the red zone.

Engro (-0.6%), MCB (-1.1%), OGDC (-0.8%), Pakistan Petroleum (-0.8%), UBL (-0.8%) and Pakistan Oilfields (-1.3%) were the major index movers during the trading session.

“Going forward, we expect the market to remain volatile with intra-day corrections and recommend investors to sell on strength,” he added.

Overall, trading volumes fell to 576.5 million shares compared with Friday’s tally of 728.8 million. The value of shares traded during the day was Rs17.5 billion.

Shares of 415 companies were traded. At the end of the day, 118 stocks closed higher, 266 declined and 31 remained unchanged.

Unity Foods (R) was the volume leader with 81.6 million shares, gaining Rs0.11 to close at Rs3.35. It was followed by Hascol Petroleum with 65.3 million shares, gaining Rs0.95 to close at Rs14.88 and WorldCall Telecom with 35.8 million shares, losing Rs0.14 to close at Rs1.34.

Foreign institutional investors were net buyers of Rs255.5 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan