Market watch: Jittery investors push PSX below 40,000

Benchmark KSE-100 index dives 554.66 points to settle at 39,632.52

KARACHI:

The stock market endured heavy selling on Monday as the KSE-100 index dived over 500 points, dragged down by speculation about monetary policy announcement later in the day coupled with concern over rising coronavirus cases.

The State Bank of Pakistan (SBP), in line with market expectation, maintained the status quo in the monetary policy and kept the interest rate unchanged at 7% for the next two months.

Stocks tumbled as a spike in Covid-19 cases in Pakistan was raising the prospect of stricter measures that could hurt the economy.

Multiple negative triggers including a sell-off in global equity markets, government’s measures to contain the spread of Covid-19 as well as rupee depreciation sparked hefty selling by investors. All index-heavy sectors closed the day in negative territory.

In the morning, the market opened on a bearish note and fell sharply during early trading. Some stability emerged at midday but it could not last long. Late session selling pushed the market further deep into the red and the index dropped below the 40,000-point mark.

At close, the benchmark KSE-100 index recorded a decrease of 554.66 points, or 1.38%, to settle at 39,632.52 points.

Arif Habib Limited, in its report, stated that as coronavirus infection cases were rising with partial lockdown in different cities, which coincided with the rollover week at the bourse, the KSE-100 took a heavy beating that resulted in the index losing 873 points during the session.

“Oil and gas marketing companies, banks and cement stocks played a major role in the drop,” it said, adding “exploration and production sector saw stock trading below previous day’s closing prices, with the exception of Pakistan Oilfields, which recovered on the back of increase in international crude prices.”

The report added that the State Bank announced its monetary policy where it kept the policy rate unchanged at 7%, which was in line with street consensus.

Sectors contributing to the negative performance included banks (-121 points), cement (-65 points), oil and gas marketing (-64 points), technology (-42 points) and fertiliser (-41 points).

Individually, stocks that contributed positively to the index included Colgate-Palmolive (+6 points), Pakistan Oilfields (+5 points), Abbott Laboratories (+3 points), Nestle (+3 points) and Habib Metropolitan Bank (+3 points).

Stocks that contributed negatively were HBL (-30 points), Pakistan State Oil (-26 points), TRG Pakistan (-26 points), Meezan Bank (-17 points) and MCB (-17 points).

Overall, trading volumes inched up to 195.5 million shares compared with Friday’s tally of 189.9 million. The value of shares traded during the day was Rs7.5 billion.

Shares of 382 companies were traded. At the end of the day, 63 stocks closed higher, 297 declined and 22 remained unchanged.

Unity Foods was the volume leader with 15.4 million shares, losing Rs0.60 to close at Rs23.12. It was followed by Hascol Petroleum with 15.3 million shares, losing Rs0.84 to close at Rs13.28 and TRG Pakistan with 13.3 million shares, losing Rs2.43 to close at Rs51.11.

Foreign institutional investors were net sellers of Rs158.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.