Market watch: Stock market falls despite positive news flow
Shares of 438 companies were traded. At the end of the day, 140 stocks closed higher. PHOTO: FILE
Despite a host of positive triggers, the benchmark KSE-100 index of the Pakistan Stock Exchange succumbed to selling pressure and dropped 185 points in a turbulent session on Tuesday.
An improvement in large-scale manufacturing reading, which jumped 5% year-on-year in July after five consecutive months of deceleration, combined with encouraging remittances data announced a day before, failed to entice investors to keep up the uptrend.
Uncertainty over the Asia-Pacific Group (APG) meeting on anti-money laundering measures took a toll on investors, who resorted to panic selling.
In addition, market speculation over the upcoming monetary policy, scheduled to be announced later in the month, weakened investors’ sentiment.
Earlier, trading began on a bullish note as strong investor interest lifted the market nearly 300 points in the first few hours. However, the buying momentum could not be sustained and a selling spree, emerging towards midday, weighed on the bourse, erasing the gains and dragging the index downwards.
At close, the benchmark KSE-100 index recorded a decrease of 184.89 points, or 0.43%, to close at 42,346.42 points.
Arif Habib Limited, in its report, stated that the market opened on a positive note, maintained the positive momentum but selling pressure in the end brought the index down by 185 points.
“Profit-booking continued from the past sessions, however, investors had generally been switching positions from stocks that had nearly doubled in value from their recent bottoms (cement) to stocks that had a muted performance (banks and oil and gas marketing companies),” it said.
Engro faced selling pressure due to it being ex-dividend, however, prospects of increase in prices of fertiliser kept buying interest alive.
Cement sector stocks performed well during the session on the back of increase in cement prices in the northern region, however, profit-booking brought the prices down again.
Oil and gas marketing companies topped the volumes with trading in 74.2 million shares, followed by cement firms (74.1 million) and power companies (63.4 million).
Among individual stocks, Hascol Petroleum led the volumes with 63.7 million shares changing hands, followed by K-Electric (54 million) and Byco (42.6 million), the report added.
Overall, trading volumes rose to 662.8 million shares compared with Monday’s tally of 509.5 million. The value of shares traded during the day was Rs18.6 billion.
Shares of 438 companies were traded. At the end of the day, 140 stocks closed higher, 281 declined and 17 remained unchanged.
Hascol Petroleum was the volume leader with 63.9 million shares, losing Rs0.24 to close at Rs22.75. It was followed by K-Electric with 54 million shares, gaining Rs0.02 to close at Rs4.12 and Byco Petroleum with 42.6 million shares, gaining Rs0.41 to close at Rs11.38.
Foreign institutional investors were net buyers of Rs145 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.