Market watch: Stocks lose ground ahead of SBP meeting

The stock market limped and closed lower on Monday as caution reigned supreme in a sluggish trading session ahead of monetary policy announcement in the evening.

The benchmark KSE-100 index remained volatile in the early half of the day, recording sharp swings albeit in a narrow range. However, after midday, the absence of triggers caused a significant decline in the index, which hit intra-day low of 42,123.61 points.

International crude oil prices slipped at the opening of trading, which put selling pressure on exploration and production stocks. Likewise, the rest of the oil and gas chain including refineries and oil marketing companies came under pressure.

Moreover, investors were wary as they awaited the monetary policy announcement later in the day. The central bank kept the policy rate unchanged at 7% for the next two months.

On the international front, Asian markets and commodities continued to dive because of emergence of a second wave of coronavirus.

At close, the benchmark KSE-100 index recorded a decrease of 330.62 points, or 0.78%, to close at 42,174.14 points.

JS Global analyst Maaz Mulla said the benchmark KSE-100 index touched intraday high and low of 46 points and 383 points respectively. “Trading remained lacklustre as investors awaited the monetary policy announcement later on Monday,” he said, adding, “lack of immediate triggers kept investors on the fence.”

“Financial, fertiliser and exploration and production sectors were the major laggards where HBL (-0.9%), MCB (-0.5), Engro Corporation (-0.9%), Oil and Gas Development Company (-1.6%), Pakistan Petroleum (-0.9%) and Pakistan Oilfields (-0.3) remained in the red.” Fauji Foods (-1.2%) also lost ground.

Traded value stood at $68 million, down 17% and volumes came in at 434 million shares, down 16% compared to the last trading session.

“Going forward, we expect the market to trade sideways due to absence of immediate triggers ahead of the rollover week and recommend that investors sell on strength,” the analyst said.

Overall, trading volumes fell to 433.9 million shares compared with Friday’s tally of 516.1 million. The value of shares traded during the day was Rs11.3 billion.

Shares of 408 companies were traded. At the end of the day, 115 stocks closed higher, 277 declined and 16 remained unchanged.

Aisha Steel Mills was the volume leader with 58.9 million shares, gaining Rs0.98 to close at Rs15.49. It was followed by Unity Foods with 48.2 million shares, gaining Rs0.26 to close at Rs18.35 and Fauji Foods with 36 million shares, losing Rs0.88 to close at Rs18.44.

Foreign institutional investors were net sellers of Rs100.32 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.