Market watch: KSE-100 extends decline over rising infections

Benchmark index sheds 376.93 points to close at 44,929.61

KARACHI:

The Pakistan Stock Exchange extended its decline on Thursday and the KSE-100 index dropped 377 points as Covid-19 cases continued to surge across the nation.

A day ago, National Command and Operation Centre (NCOC) Chairman Asad Umar warned of a complete lockdown in major cities of Pakistan to contain the virus. This announcement, in particular, dented investor spirits and they preferred to remain on the sidelines.

Investors also took cue from a gloomy Covid situation in neighbouring India, which posed a threat to Pakistan’s health system as well.

A persistent fall in international oil prices triggered sell-off in local oil sectors, which closed entirely in the red.

A host of encouraging financial results, announced during the trading session, failed to lift investor sentiment and they continued to book profit.

Earlier, trading began on a positive note, however, an unimpressive economic picture, in the wake of worsening Covid-19 situation, wiped out the gains and dragged the market down.

The index fell steadily throughout the day, but late session buying erased some of the losses.

At close, the benchmark KSE-100 index recorded a decrease of 376.93 points, or 0.83%, to settle at 44,929.61 points.

Arif Habib Limited, in its report, stated that growing cases of coronavirus, particularly in major cities, made the investors perturbed for a second day.

Despite healthy earnings announced by companies during the session, the KSE-100 index went down by 424 points, it said. At close, the index stood down by 377 points.

Exploration and production, cement and steel stocks contributed the most to the decline, whereas banking sector stocks recorded a pickup in prices.

Notable companies which declared results were Engro and UBL, which made the announcement at the beginning of the session including dividend declaration. However, selling pressure brought stock prices down by the end of trading, the report said.

JS Global analyst Muhammad Mubashir said that the possibility of a complete lockdown in major cities kept the market under pressure throughout the day as the index lost 377 points (-0.8% day-on-day) to close at 44,930.

NCOC on Wednesday warned of more restrictions and a complete lockdown in major cities to control the worsening Covid-19 situation in the country.

Traded volumes decreased from 388 million shares to 329 million shares (-15% day-on-day) while traded value dropped 18% at $104 million.

Stocks that contributed significantly to the volumes included Ghani Global Holdings (+7.5%), TRG Pakistan (-0.9%), WorldCall Telecom (-5%), Unity Foods (-3.3%) and Telecard Limited (+7.5%), which accounted for 38% of the total volume.

In other news, British High Commissioner Christian Turner said that the UK would fully support Pakistan in the Financial Action Task Force (FATF).

Moreover, decent activity was witnessed in Engro (+1.2%) and UBL (+4.1%) following their result announcements.

“We recommended investors to avail the downside as a buying opportunity in cement, refinery and steel sectors,” the analyst said.

Overall trading volumes fell to 328.9 million shares compared with Wednesday’s tally of 387.9 million. The value of shares traded during the day was Rs15.9 billion.

Shares of 390 companies were traded. At the end of the day, 92 stocks closed higher, 276 declined and 22 remained unchanged.

Ghani Global Holdings was the volume leader with 36.4 million shares, gaining Rs2.32 to close at Rs33.37. It was followed by TRG Pakistan with 30.2 million shares, losing Rs1.59 to close at Rs171.63 and WorldCall Telecom with 26.9 million shares, losing Rs0.08 to close at Rs1.53.

Foreign institutional investors were net sellers of Rs82.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.