Bears staged a return to the bourse on Thursday as Pakistan’s stock market snapped a three-day winning streak with the KSE-100 index diving 633 points on fading optimism about the Covid-19 vaccine.
Investors took cue from surging Covid-19 cases across the country and saw the possibility of a second national-level lockdown if the trend persisted. The second lockdown would be detrimental to the country’s economy and hit growth figures severely.
Subsequently, investors adopted a cautious stance during trading hours, which triggered stock selling and dragged the market down. As the selling spell stretched to the end of the session, all index-heavy sectors including oil, banks and cement suffered hefty losses.
Earlier, trading began on a negative note and the KSE-100 index remained in the negative zone for the rest of the day. Encouraging remittances data, which showed that Pakistan attracted inflows of over $2 billion for the fifth consecutive month in October, failed to turn direction of the market.
At close, the benchmark KSE-100 index recorded a decrease of 632.76 points, or 1.54%, to settle at 40,564.56 points.
A report of Arif Habib Limited stated that the market took a beating on rising Covid cases as well as government’s initiative to ramp up social distancing efforts.
Oil and Gas Regulatory Authority’s (Ogra) decision to slash the unaccounted-for-gas (UFG) allowance on re-gasified liquefied natural gas (RLNG) affected Sui Northern Gas Pipelines Limited’s (SNGPL) prospects, which pushed its stock to the lower circuit.
Cement-sector stocks carried forward the negative vibes from Wednesday, which came from lower dispatches in the first week of November compared to the previous month and year.
Selling activity took over the bourse with major impact coming from exploration and production and banking sectors, which was partly due to profit-booking, the report added.
JS Global analyst Maaz Mulla said selling pressure was witnessed across the board at the Pakistan Stock Exchange, where the benchmark index hit intraday low of -704 points and closed at 40,564, down 1.5%.
Daily traded value stood at $71 million while volumes came in at 328 million shares.
Unity Foods (-3.4%), Soneri Bank (+6.8%), TRG Pakistan (-5%) and Maple Leaf Cement (-3.5%) recorded cumulative trading in 90 million shares.
Coal prices increased in the international market and as a result pressure mounted on cement stocks. Maple Leaf Cement (-3.5%), Pioneer Cement (-3.9%), Lucky Cement (-1.4%), Cherat Cement (-2.8%), DG Khan Cement (-2.1%) and Fauji Cement (-2.3%) lost ground.
From the exploration and production sector, Pakistan Petroleum (-3%), Oil and Gas Development Company (-2.9%) and Pakistan Oilfields (-1.9%) remained in the negative region despite increase in crude oil prices in the international market.
Steel stocks fell below their previous close, among which International Steels (-1.4%), International Industries (-4.2%), Amreli Steels (-3.7%) and Agha Steel Industries (-2.6%) were the major losers.
“We expect the market to remain bullish ahead, however, with uncertainties 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 climbed to 328.3 million shares compared with Wednesday’s tally of 244.3 million. The value of shares traded during the day was Rs11.3 billion.
Shares of 400 companies were traded. At the end of the day, 80 stocks closed higher, 308 declined and 12 remained unchanged.
Unity Foods was the volume leader with 29.7 million shares, losing Rs0.78 to close at Rs22.35. It was followed by Soneri Bank with 22.5 million shares, gaining Rs0.64 to close at Rs9.99 and TRG Pakistan with 19.6 million shares, losing Rs2.77 to close at Rs53.17.
Foreign institutional investors were net sellers of Rs98.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
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