Market watch: Stocks fall as stricter lockdown fears loom

Benchmark KSE-100 index drops 222.85 points to close at 44,706.76

KARACHI:

The Pakistan Stock Exchange (PSX) landed in the red for the third consecutive day on Friday as the benchmark KSE-100 index shed over 200 points.

The bourse dipped to intra-day low of 566 points, however, mid-session buying wiped off some of the losses.

Concerns about rising coronavirus cases dented the investment climate as investors kept a close watch on news about measures to be taken by the government to contain the spread of Covid-19 during the third wave in Pakistan.

A host of unexpected financial results took a toll on some of the sectors and forced investors to trade cautiously.

The KSE-100 index spiralled downwards from the moment trading began, however, it enjoyed gains at regular intervals.

At close, the benchmark KSE-100 index recorded a decrease of 222.85 points, or 0.5%, to settle at 44,706.76 points.

Arif Habib Limited, in its report, stated that the market declined further by 566 points during the session. It came on the back of anticipation of a lockdown at the national level, which prompted investors to adopt a cautious approach and avoid taking new positions.

Kot Addu Power Company announced financial results, which had little impact on its stock price due to no declaration of dividend against market expectation.

Oil and gas marketing companies, exploration and production, cement and steel sectors came under selling pressure, sparked by institutional investors.

Sectors contributing to the performance included exploration and production (-54 points), chemical (-40 points), fertiliser (-38 points), power (-32 points) and textile (-28 points).

Individually, stocks that contributed positively to the index included TRG Pakistan (+49 points), Habib Metropolitan Bank (+30 points), Adamjee Insurance Company (+15 points), NBP (+12 points) and PSX (+5 points).

Stocks that contributed negatively were Oil and Gas Development Company (-31 points), Colgate-Palmolive (-31 points), Hubco (-27 points), Engro Corporation (-16 points) and HBL (-12 points).

JS Global analyst Muhammad Mubashir said that the market opened in the red and touched intra-day low of 44,363 (-566 points). It remained under pressure amid announcement of strict enforcement of restrictions across the country.

However, there was partial recovery later in the day and the KSE-100 index closed at 44,706 (down 223 points).

Volumes remained subdued amid uncertainty, decreasing from 329 million shares on Thursday to 240 million shares.

Stocks that contributed the most to the volumes were Ghani Global Holdings (+4.9%), WorldCall Telecom (+2%), TRG Pakistan (+2.6%), Unity Foods (-1.6%), Byco Petroleum (-0.5%) and Telecard Limited (+7.4%).

Better activity was witnessed in Habib Metropolitan Bank (+7.4%) on the back of announcement of first quarter earnings per share of Rs3.1. up 111% year-on-year.

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

Overall trading volumes dived to 240.5 million shares compared with Thursday’s tally of 328.9 million. The value of shares traded during the day was Rs11.8 billion.

Shares of 364 companies were traded. At the end of the day, 126 stocks closed higher, 223 declined and 15 remained unchanged.

Ghani Global Holdings was the volume leader with 38.8 million shares, gaining Rs1.64 to close at Rs35.01. It was followed by WorldCall Telecom with 24.1 million shares, gaining Rs0.03 to close at Rs1.56 and TRG Pakistan with 23.6 million shares, gaining Rs4.54 to close at Rs176.17.

Foreign institutional investors were net buyers of Rs391.4 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.