Investor sentiment turned bearish at the Pakistan Stock Exchange on Friday as market participants took cue from a plunge in global oil prices coupled with lack of clarity over the US presidential election.
Resultantly, the benchmark KSE-100 index shed 340 points and closed below the 41,000-point mark. The correction was due following frequent rallies over the past few sessions.
Index-heavy automobile, cement, financial, fertiliser and oil sectors endured selling pressure and closed with significant losses.
Earlier, trading began on a positive note, however, volatility emerged shortly afterwards, which dragged the index down. First session of the day ended with a loss of 154 points.
In the second session again, trading kicked off on an encouraging note but the lack of positive triggers and widespread uncertainty erased the gains and inflated the losses.
At close, the benchmark KSE-100 index recorded a decrease of 339.69 points, or 0.83%, to settle at 40,731.61 points.
A report of Arif Habib Limited stated that after posting gains of roughly 2,400 points, courtesy US election and spike in commodity prices, the KSE-100 index showed signs of consolidation with a downward adjustment of 340 points.
“Selling pressure was observed across the board, especially on banking and exploration and production stocks,” it said. “International crude oil prices dipped 3% that caused depression in exploration and production stocks.”
The fluid domestic political scene also did not go unnoticed and sparked some concern among investors about the impact on the government, the report said.
JS Global analyst Maaz Mulla said the benchmark KSE-100 index dropped 340 points to close at 40,732. The market remained volatile with decent volumes, he said.
Profit-taking was noted at the bourse where Unity Foods (+2.7%), Hascol Petroleum (-0.1%), TRG Pakistan (+7.3%), Power Cement (+4.5%) and Pakistan Refinery (-2.1%) were the major volume contributors with a cumulative 161 million shares changing hands.
The cement sector received a battering where DG Khan Cement (-1.2%), Maple Leaf Cement (-1.1%), Pioneer Cement (-1.2%), Cherat Cement (-1.2%) and Lucky Cement (-0.7%) lost value and closed in the red.
The banking sector also closed lower where UBL (-2%), HBL (-2.3%), MCB (-2%) and Bank Alfalah (-1.5%) lost ground.
Investors’ interest was witnessed in the technology sector where NetSol (+1.9%), TRG Pakistan (+7.3%) and Avanceon (+1.2%) gained ground compared to their previous day’s close.
“We expect the market to remain bullish ahead, however, with uncertainty amid political noise and increasing corona cases. Hence, we recommend investors to book profit on the higher side and wait for any sharp dip to accumulate value stocks,” the analyst said.
Overall, trading volumes dropped to 350.4 million shares compared with Thursday’s tally of 356.7 million. The value of shares traded during the day was Rs11.5 billion.
Shares of 390 companies were traded. At the end of the day, 132 stocks closed higher, 237 declined and 21 remained unchanged.
Unity Foods was the volume leader with 49 million shares, gaining Rs0.64 to close at Rs23.95. It was followed by Power Cement with 43.6 million shares, gaining Rs0.46 to close at Rs10.65 and TRG Pakistan with 31.3 million shares, gaining Rs3.69 to close at Rs53.94.
Foreign institutional investors were net sellers of Rs203.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan
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