Market watch: Bourse turns bearish, falls 390 points

Benchmark KSE-100 index drops 0.85% to close at 45,292.87

KARACHI:

Bears dominated trading at the Pakistan Stock Exchange on Tuesday as investor optimism, witnessed a day ago, evaporated and resultantly, the KSE-100 index shed 390 points.

A persistent drop in global oil prices triggered a selling spree in the local oil sectors and all oil-related stocks closed with losses. Fuelling the drop, index-heavy cement, financial and fertiliser sectors recorded a modest sell-off.

Investors were quick to book healthy profits following strong earnings announcements during the session, which dragged the KSE-100 index into the red zone.

Earlier, trading began on a positive note and the index rose towards the 46,000-point mark in the initial hour. However, the investors started booking profits following the announcement of financial results, which sparked a selling spree and wiped off the gains.

The bearish trading accelerated later in the day, which inflated the losses.

At close, the benchmark KSE-100 index recorded a decrease of 389.90 points, or 0.85%, to settle at 45,292.87 points.

JS Global analyst Muhammad Mubashir said that a volatile session was witnessed as the KSE-100 index opened on a positive note, touching intraday high of 45,938 points in the initial hours.

“However, the psychological barrier of 46,000 triggered profit-taking and the market slid to close in the negative zone at 45,293 (-390 points),” he said.

Major selling activity was witnessed in the exploration and production sector (Oil and Gas Development Company -4.8% and Pakistan Petroleum -4.3%) and the cement sector (DG Khan Cement -2% and Lucky Cement -0.9%).

Total trading volumes decreased 10% to 367 million shares, compared to 409 million shares in the previous session.

Stocks that contributed significantly to the overall volumes included Telecard (+2.1%), Unity Foods (+1.9%), Flying Cement (-26.2%), TRG Pakistan (-1.3%) and Azgard Nine (+3.9%), which accounted for 41% of the total volumes.

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

Arif Habib Limited, in its report, stated that the excitement observed on Monday withered away when the benchmark index recorded a decline of 513 points during the session. The index closed down by 390 points.

Stocks that faced selling were Oil and Gas Development Company, Pakistan Petroleum and PSO, which performed well the other day.

Investor sentiment remained low throughout the trading session with persistent selling in oil and gas marketing companies, exploration and production, cement and steel sectors.

Among technology stocks, TRG Pakistan closed below previous day’s closing price whereas NetSol hit its upper circuit, the report said.

Overall trading volumes fell to 366.8 million shares compared with Monday’s tally of 409.1 million. The value of shares traded during the day was Rs17.3 billion.

Shares of 395 companies were traded. At the end of the day, 188 stocks closed higher, 191 declined and 16 remained unchanged.

Telecard Limited was the volume leader with 48.1 million shares, gaining Rs0.32 to close at Rs15.31. It was followed by Unity Foods with 43.4 million shares, gaining Rs0.61 to close at Rs32.12 and Flying Cement (R) with 26.6 million shares, losing Rs0.27 to close at Rs0.76.

Foreign institutional investors were net sellers of Rs351.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.