Market watch: Selling pressure drags KSE-100 down

KARACHI:

Selling pressure persisted at the Pakistan Stock Exchange on Tuesday, which pulled the KSE-100 index down by 427 points as the emergence of a new Covid-19 strain weighed on investors’ sentiment.

The coronavirus strain, discovered in the UK, sent financial and equity markets around the world plunging.

A dip in global oil prices, as a result of negative news flow, had a spillover effect on the domestic oil sectors and stocks of exploration and production and oil marketing companies faced a substantial selloff.

Index-heavy automobile, cement, pharmaceutical and financial sectors experienced modest selling activity and closed in the red.

Upbeat current account data, which showed a surplus for the fifth consecutive month in November, failed to entice market participants to turn direction of the market.

Earlier, trading began with minor ups and downs, however, the index climbed during early hours. After midday, the market reversed its trend and began marching downwards. The decline deepened further later in the day, which inflated the losses.

At close, the benchmark KSE-100 index recorded a decrease of 426.82 points, or 0.98%, to settle at 42,906.94 points.

Arif Habib Limited, in its report, stated that the market opened on a positive note and added 145 points before collapsing under selling pressure on exploration and production, bank and cement stocks.

International crude oil prices were subdued after Monday’s blow and caused selling pressure in the exploration and production sector at Pakistan bourse.

Separately, foreign investors had been “spring-cleaning” their stockholding in the banking sector, before the close of calendar year, which played a significant role in bringing the index down as compared to the general notion of rollover week pressure, the report said.

JS Global analyst Maaz Mulla said the benchmark KSE-100 index closed negative again, losing 427 points at 42,907. “Volatility prevailed in the market amid profit-taking due to the rollover week,” he said.

Traded value inched up 1% to $141 million while volumes increased 9% to 562 million shares.

Major contribution to the total market volume came from WorldCall Telecom (-0.9%), Invest Capital Investment Bank (+4.8%), TRG Pakistan (-5.6%), Pakistan Refinery (-7%), Telecard Limited (+8.4%), Avanceon (-7.5%), Unity Foods (-3.7%) and Azgard Nine (-7.5%).

Selling pressure was witnessed in the technology sector where Avanceon (-7.5%) and NetSol (-7.5%) hit their respective lower locks, while TRG Pakistan (-5.6%) also remained in the red.

A same trend was noted in the refinery sector where National Refinery (-7.5%), Pakistan Refinery (-7%) and Attock Refinery (-7.5%) lost ground.

 “Going forward, we expect the market to remain volatile with intraday corrections. We recommend investors to sell on strength,” the analyst said.

Overall, trading volumes surged to 561.9 million shares compared with Monday’s tally of 516.5 million. The value of shares traded during the day was Rs22.6 billion.

Shares of 411 companies were traded. At the end of the day, 103 stocks closed higher, 289 declined and 19 remained unchanged.

WorldCall Telecom was the volume leader with 70.8 million shares, losing Rs0.03 to close at Rs1.14. It was followed by Invest Capital Investment Bank with 30.8 million shares, gaining Rs0.26 to close at Rs3.36 and TRG Pakistan with 23.6 million shares, losing Rs3.88 to close at Rs71.83.

Foreign institutional investors were net sellers of Rs408.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.