Market watch: Stocks rattled after Trump tested Covid positive

Benchmark KSE-100 index falls 606.09 points to settle at 40,070.83

KARACHI:

Bears staged a comeback at the stock market on Friday as the benchmark index dived over 600 points in the wake of multiple negative triggers that encircled many index-heavy sectors.

Investor sentiment weakened after US President Donald Trump confirmed rumours of him testing positive for the coronavirus.

A decline in global crude oil prices during the session, coupled with struggling global equities, sparked volatility, leading to bearish trading at the Pakistan bourse. Oil sector stocks bore the brunt of the dip in international crude prices, which dropped over 4%.

Earlier, during the first session, bears and bulls wrestled to take control of the market. However, selling pressure emerged later and henceforth, the index started moving south.

By the second session, all the gains were erased and the KSE-100 index entered the negative zone. Selling pressure intensified in final hours, which dragged the index below the 39,000-point mark.

As negative triggers dominated trading, oil and gas marketing, exploration and production, cement and banking sectors particularly came under pressure.

At close, the benchmark KSE-100 index recorded a decrease of 606.09 points, or 1.49%, to settle at 40,070.83 points.

Arif Habib Limited, in its report, stated that selling pressure continued to weigh on the market due to a couple of reasons – domestic political uncertainty and a fresh wave of coronavirus cases, with US President Donald Trump also testing positive.

International crude oil prices dropped significantly, especially after the announcement that President Trump had tested corona positive, it said, adding, “This triggered selling in local exploration and production stocks including Oil and Gas Development Company, Pakistan Petroleum and Pakistan Oilfields.”

At the same time, redemptions by mutual funds prompted institutional sell-off as well.

Volumes remained heavily tilted in favour of oil and gas marketing companies, particularly Hascol Petroleum. However, its stock price touched the lower circuit. Tech stocks, which recorded sky-high prices in the previous session, also lost substantial ground.

Individually, stocks that contributed positively to the index included Hubco (+16 points), Bank AL Habib (+16 points), Interloop (+4 points), Honda Atlas Cars (+4 points) and Agriauto Industries (+3 points).

Stocks that contributed negatively were Pakistan Petroleum (-51 points), Oil and Gas Development Company (-45 points), TRG Pakistan (-36 points), Pakistan Oilfields (-33 points) and Pakistan State Oil (-30 points).

JS Global analyst Danish Ladhani said the benchmark KSE-100 index touched a low of -771 points and closed down by 606 points at 40,071.

“In later hours of the trading session, likely mutual fund redemptions steamrolled the sentiment downwards,” he said.

Exploration and production and financial stocks were the major laggards, among which Pakistan Petroleum (-3.6%), Oil and Gas Development Company (-3%), Pakistan Oilfields (-2.7%), HBL (-1.2%) and MCB (-0.7%) lost ground.

Engro Corporation (-1.3%), Lucky Cement (-1.3%) and Pakistan State Oil (-3.2%) also closed in the red.

“Moreover, oil in the international market was nearly 4% down after US President Donald Trump tested positive for Covid-19. Furthermore, US lawmakers failed to agree on a stimulus package,” he added.

Nishat Chunian (-3.6%) announced FY20 consolidated earnings per share of Rs7.75 versus Rs16.26 last year, with a cash payout of Re1 per share.

“Going forward, we expect the market to trade sideways due to political uncertainty and recommend investors to sell on strength,” the analyst said.

Overall, trading volumes dropped to 348.6 million shares compared with Thursday’s tally of 371.7 million. The value of shares traded during the day was Rs12.4 billion.

Shares of 398 companies were traded. At the end of the day, 86 stocks closed higher, 302 declined and 10 remained unchanged.

Hascol Petroleum was the volume leader with 52.7 million shares, losing Rs1.30 to close at Rs17.37. It was followed by K-Electric with 35.1 million shares, losing Rs0.11 to close at Rs4.04 and TRG Pakistan with 24.7 million shares, losing Rs3.46 to close at Rs46.65.

Foreign institutional investors were net sellers of Rs98.4 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.