Market watch: KSE-100 slumps in line with global markets

Benchmark index dives 368.96 points to settle at 47,318.03

KARACHI:

After a day’s respite, the bears staged a comeback at the Pakistan bourse, pulling the KSE-100 index down by over 350 points as market participants took cue from the tumbling global markets.

Asian stock markets dived as disruptions from China’s latest crackdown on a range of industries worsened. Moreover, international investors’ attention turned to the US Federal Reserve, which kicked off its two-day policy meeting.

In addition to that, the surging coronavirus cases in Pakistan amid the fourth wave of Covid-19 rattled investors and pushed the benchmark KSE-100 index deep into the red.

The State Bank of Pakistan’s decision to hold the policy rate at 7% and a host of financial results announced during the trading session, mostly in the food sector, failed to entice market participants.

Earlier, trading kicked off on a positive note, however, the KSE-100 index started falling soon after and dipped over 400 points. The market finished trading in the red as weak investor sentiment restricted it from entering the positive territory.

At close, the benchmark KSE-100 index recorded a decrease of 368.96 points, or 0.77%, to settle at 47,318.03.

Arif Habib Limited, in its report, stated that the market tumbled later in the trading session, which brought the index down by more than 400 points. It closed lower by 369 points.

“Concerns over Covid lockdown and a probe by the regulator on account of unusual price movement in certain stocks brought the market under selling pressure and became the major reasons for weak sentiment,” it said.

Earlier part of the session saw institutional investors build positions in cement and steel sectors that caused pertinent stocks to record a healthy price uptick. However, later activity in the market brought the stock prices down.

Sectors contributing to the performance included technology (-90 points), cement (-42 points), refinery (-33 points), banks (-31 points) and exploration and production (-30 points).

Individually, stocks that contributed positively to the index included Kohinoor Textile Mills (+24 points), Meezan Bank (+14 points), Colgate-Palmolive (+14 points), Pakistan Tobacco Company (+4 points) and Dawood Hercules (+4 points).

Stocks that contributed negatively were TRG Pakistan (-73 points), Unity Foods (-25 points), National Refinery (-17 points), Hubco (-16 points) and Lucky Cement (-16 points).

JS Global analyst Muhammad Mubashir said that the bourse opened on a positive note and touched intra-day high of +188 points in the initial hours. However, after trading sideways for most of the day, a sharp across-the-board sell-off was seen towards the end of the session.

The index declined to a low of -445 points and closed the day at 47,318.

Traded volume stood at 366 million shares with WorldCall Telecom (-4.5%), Byco Petroleum (-1.6%), Telecard Limited (-1.4%), Unity Foods (-5.5%), K-Electric (-0.3%) and Hum Network (-5.8%) being the major contributors.

On the economic front, the International Monetary Fund revised upwards the GDP growth projection for Pakistan to 3.9% for FY21 and the State Bank maintained the policy rate at 7% to support economic growth.

“Going forward, in light of rising Covid-19 cases and stricter restrictions, we recommend investors to adopt a buy-on-dip strategy in banking and exploration and production sectors,” the analyst said.

Overall trading volumes fell to 365.8 million shares compared with Tuesday’s tally of 432.6 million. The value of shares traded during the day was Rs12.3 billion.

Shares of 432 companies were traded. At the end of the day, 91 stocks closed higher, 329 declined and 12 remained unchanged.

WorldCall Telecom was the volume leader with 40.4 million shares, losing Rs0.17 to close at Rs3.57. It was followed by Byco Petroleum with 26.9 million shares, losing Rs0.16 to close at Rs9.90 and Telecard Limited with 13.2 million shares, losing Rs0.21 to close at Rs14.86.

Foreign institutional investors were net buyers of Rs74.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.