Market watch: Bears hold sway as PSX dives 407 points

Benchmark KSE-100 index falls 0.93% to settle at 43,333.76

KARACHI:

The stock market gave in to bearish pressure on Monday as the benchmark KSE-100 index dived over 400 points owing to weak cues coupled with the economic headwinds faced globally.

Weakening oil prices in the international market coupled with rising coronavirus cases fuelled the bearish momentum at the opening of rollover week.

Oil prices tumbled more than $3 before trimming losses as a fast-spreading new coronavirus strain that had led to tighter restrictions in Europe sparked worries about a slower recovery in fuel demand.

The benchmark index opened down and despite brief spikes it maintained its march towards south. The downward trend turned steeper towards the end of the session. Nevertheless, the bourse managed to sustain the 43,000-point mark.

At close, the benchmark KSE-100 index recorded a decrease of 406.80 points, or 0.93%, to settle at 43,333.76 points.

Arif Habib Limited, in its report, stated that the first day of rollover week faced the impact of weakening international crude oil prices, which fell over 5% during the trading session due to lockdown fears in developed countries.

“Stocks that were subject to rollover largely performed well against main board stocks,” it said.

The exploration and production sector remained under heavy selling pressure, followed by banking and cement sectors, primarily due to profit-booking as observed on Friday when the index virtually touched the base with the 44,000-point mark.

Sectors contributing to the performance included exploration and production (-178 points), banks (-92 points), cement (-45 points), fertiliser (-36 points) and auto (-23 points).

Individually, stocks that contributed positively to the index included Pakistan Tobacco Company (+14 points), Services Industries (+14 points), Fauji Fertiliser (+9 points), TRG Pakistan (+9 points) and Kohinoor Textile Mills (+8 points).

Stocks that contributed negatively included Oil and Gas Development Company (-69 points), Pakistan Petroleum (-60 points), HBL (-33 points), Engro Corporation (-32 points) and Pakistan Oilfields (-31 points).

JS Global analyst Muhammad Mubashir said the rollover week triggered profit-taking and the index closed the session at 43,334, down 407 points. “Investors booked profit on the higher side.”

Volumes stood at 516 million shares. TRG Pakistan (+1.1%), WorldCall Telecom (+8.3%), Pakistan Refinery (+4%), Unity Foods (-1.6%) and Avanceon (+6%) led the volumes.

Major pressure was witnessed in the cement and refinery sectors. The steel sector remained in the limelight on the back of expected price increase by domestic manufacturers.

In the sector, International Industries (+2.6%), Aisha Steel Mills (+2.2%), Mughal Iron and Steel (+7.5%) and International Steels (+1.3%) closed in the green.

“Moving forward, we expect the market to remain bullish and recommend investors to buy on dips,” the analyst said.

Overall, trading volumes surged to 516.5 million shares compared with Friday’s tally of 482.6 million. The value of shares traded during the day was Rs22.5 billion.

Shares of 404 companies were traded. At the end of the day, 154 stocks closed higher, 224 declined and 26 remained unchanged.

WorldCall Telecom was the volume leader with 36.6 million shares, gaining Rs0.09 to close at Rs1.17. It was followed by TRG Pakistan with 35.2 million shares, gaining Rs0.85 to close at Rs75.71 and Invest Capital Investment Bank with 31 million shares, gaining Rs0.99 to close at Rs3.10.

Foreign institutional investors were net sellers of Rs733.1 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.