Market watch: KSE-100 recoups losses, still ends 70-point down

Benchmark index decreases 0.17% to settle at 41,806.37

KARACHI:

The Pakistan Stock Exchange (PSX) succumbed to selling pressure in a topsy-turvy session on Thursday and the KSE-100 index edged down 70 points after recouping most of the losses.

A bear-run in global markets, in the wake of worsening coronavirus situation across the world, took a toll on Pakistan’s bourse and triggered sell-off in index-heavy stocks.

Encouraging current account data, announced on Wednesday, which showed a surplus for the second consecutive month in August 2020, failed to lift the benchmark index upwards.

Following a brief open in the positive zone, the bourse turned bearish and the KSE-100 index began declining as investors resorted to divesting their holdings. The index staged a modest recovery after midday as market participants acted to erase the losses. Nevertheless, the index failed to end on a positive note.

At close, the benchmark KSE-100 index recorded a decrease of 69.89 points, or 0.17%, to settle at 41,806.37 points.

Arif Habib Limited, in its report, stated that the market endured heavy selling pressure, particularly in cement, exploration and production, and banking sectors that brought the index down by 459 points.

“A recovery began by midday, which brought the index back and it closed the session down by 70 points,” it said.

Settlement of rollover trades, fears of rising coronavirus cases as well as weak investor sentiment in international markets led domestic investors to stay cautious.

The cement sector registered trading volumes of 53.5 million shares, followed by power firms (49.3 million) and technology companies (43.3 million), the report said.

JS Global analyst Maaz Mulla said a volatile session was witnessed at the bourse where the market touched intraday low of -459 points. “However, recovery came in the second half following which the market closed at 41,806 (down 70 points),” he said.

Traded value stood at $91 million, up 17% and volumes came in at 435 million shares, down 25%.

Major contribution to the total market volumes came from K-Electric (-0.7%), Unity Foods (+0.2%), Hascol Petroleum (+0.2%) and Power Cement (+3.2%) with a cumulative 126 million shares changing hands.

Ferozsons Laboratories (+7.5%) from the pharmaceutical sector declared its FY20 result, where the company posted earnings per share (EPS) of Rs13.11 with cash dividend of Rs4 per share along with a bonus of 20%.

Nishat Chunian (-4.6%) from the power sector declared its FY20 result, where the company announced EPS of Rs12.54 with no cash payout.

Furthermore, The Organic Meat Company Limited (+1.4%) from the food sector unveiled its FY20 result, where the company declared EPS of Rs3.71 and cash payout of Rs2 per share.

Selling pressure was witnessed in the exploration and production sector where Oil and Gas Development Company (-3.1%), Pakistan Oilfields (-0.4%) and Pakistan Petroleum (-2.3%) lost value as crude oil prices edged lower in the international market.

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

Overall, trading volumes fell to 434.9 million shares compared with Wednesday’s tally of 582.8 million. The value of shares traded during the day was Rs15.1 billion.

Shares of 423 companies were traded. At the end of the day, 142 stocks closed higher, 258 declined and 23 remained unchanged.

K-Electric was the volume leader with 40.5 million shares, losing Rs0.03 to close at Rs4.18. It was followed by Unity Foods with 33.2 million shares, gaining Rs0.03 to close at Rs18.04 and Hascol Petroleum with 32.1 million shares, gaining Rs0.04 to close at Rs21.08.

Foreign institutional investors were net sellers of Rs560.4 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.