Market watch: Weak global cues drag KSE-100 down

Benchmark index falls 75.79 points to settle at 40,068.50


Our Correspondent October 15, 2020
Shares of 434 companies were traded. At the end of the day, 199 stocks closed higher. PHOTO: FILE

KARACHI:

Uncertainty prevailed at the Pakistan Stock Exchange on Thursday, which kept stock trading in a narrow range as the benchmark KSE-100 index fell 76 points.

Investors were wary ahead of a public rally of opposition parties against the government on Friday. A slump in global stock markets and oil prices, on the back of climbing coronavirus cases, fuelled the downtrend.

Europe’s main markets were on course for their worst day in three weeks while the MSCI’s broadest index of Asia-Pacific shares lost 1.3% with Hong Kong and India both down over 2% and Japan’s Nikkei dropping 0.5%.

Local oil sector stocks bore the brunt of over 3% drop in international crude prices. Most of the oil-related stocks at the local bourse lost ground.

Earlier, stock trading kicked off with a sharp spike and the market remained on the uptrend for most part of the day.

The trend reversed later in the day when weakening global cues, coupled with uncertainty over Friday’s public rally, dented investor sentiment, which triggered a selling spree and pushed the market into the negative zone. Nevertheless, the market managed to sustain the 40,000-point mark.

At close, the benchmark KSE-100 index recorded a decrease of 75.79 points, or 0.19%, to settle at 40,068.50 points.

Arif Habib Limited, in its report, stated that the market opened on a positive note with +89 points and added a total of 389 points during the session.

“Concerns over political uncertainty, especially the public rally by the alliance of opposition parties scheduled for Friday, brought the index down by 76 points by the end of the session,” it said.

Some exploration and production stocks as well as chemical sector stocks posted gains. Besides, Oil and Gas Development Company and Pakistan Petroleum, chemical sector stocks Engro Polymer, Sitara Peroxide and Descon Oxychem traded at or near their upper circuits, the report said.

JS Global analyst Danish Ladhani said the market closed with a loss of 76 points after hitting high and low of +389 and -138 points. The index ended the volatile session with slim volumes at 40,068.

Profit-taking with little investor participation and political apprehension brought the index down. On the political front, the Pakistan Democratic Movement is kicking off its first demonstration in Gujranwala.

A Financial Action Task Force (FATF) meeting is also on the cards. Out of a total of 40 recommendations, the Mutual Evaluation Report of the Asia-Pacific Group (APG) found Pakistan non-compliant with four, largely compliant with eight and partially compliant with 28 recommendations.

Financial, cement and exploration and production sectors were the major laggards. HBL (-1.5%), MCB (-0.9%), Lucky Cement (-0.6%), Pakistan Oilfields (-0.7%), DG Khan Cement (-1.7%), UBL (-0.4%) and Pakistan Petroleum (-0.4%) contributed to the negative close.

Engro Polymer (+7.5%) in the chemical sector announced 3QCY20 earnings per share of Rs2.07 versus Rs1.40 in the same period of last year with no cash payout.

Moreover, Engro Polymer in its material information announced that Engro Peroxide, a wholly owned subsidiary of Engro Polymer, would be resuming work on the hydrogen peroxide project in the last quarter of 2020.

SNGPL (-1.5%) announced 9MFY20 earnings per share of Rs9.11 versus Rs12.33 in the same period of last year with no cash dividend.

“Going forward, we expect the market to trade sideways and recommend investors to buy on dips,” the analyst said.

Overall, trading volumes rose to 324.8 million shares compared with Wednesday’s tally of 232.8 million. The value of shares traded during the day was Rs11 billion.

Shares of 434 companies were traded. At the end of the day, 199 stocks closed higher, 216 declined and 19 remained unchanged.

Hascol Petroleum was the volume leader with 30.6 million shares, losing Rs0.25 to close at Rs15.52. It was followed by Pakistan International Bulk Terminal with 17.7 million shares, gaining Rs0.29 to close at Rs12.12 and Unity Foods with 17.5 million shares, losing Rs0.3 to close at Rs16.71.

Foreign institutional investors were net sellers of Rs214.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.

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