Market watch: Soaring Covid tally sparks volatility at bourse

Volatility struck the Pakistan Stock Exchange on Thursday as the benchmark KSE-100 index oscillated between red and green territories with investor spirit shattered by an alarming rise in the number of Covid-19 cases across the country.

A proposal from the Sindh government to lock down Karachi for 15 days to contain the spread of infections took a toll on the minds of investors, who resorted to offloading their positions.

The tightening of Covid-related restrictions in the financial hub of Pakistan would spell doom for the recovering economy, hence market participants booked profit ahead of any such announcement.

On the flip side, the KSE-100 index received support from strong corporate earnings, announced by the banking and fertiliser sectors, which helped erase most of the losses by the day’s end.

Earlier, trading kicked off with minor ups and downs, however, the index dived below the 47,000-point mark after the possibility of a lockdown was hinted at by the Sindh government.

Buoyed by encouraging financial results, the KSE-100 index staged a modest recovery midway as investors began cherry-picking stocks that had dropped to attractive valuations. However, the combo of bullish and bearish sentiment caused the KSE-100 index to end flat.

At close, the benchmark KSE-100 index recorded a decrease of 5.7 points, or 0.01%, to settle at 47,312.33.

Arif Habib Limited, in its report, stated that the market lost another 363 points during Thursday’s session, however, it recovered a lot of lost ground and ended the day down by just six points.

Bank, exploration and production, cement, power and technology sectors faced selling pressure on concern over the potential lockdown as well as rollover positions, whereby investors preferred to sell in the ready market and bought futures.

Lucky Cement saw abrupt movements where the stock price remained depressed for almost the entire session, moved up in the last half hour and faced a major sell-off in the closing minute. The stock ended at the lowest price of the session, the report said.

Overall trading volumes climbed to 376.4 million shares compared with Wednesday’s tally of 365.8 million. The value of shares traded during the day was Rs12.3 billion.

Shares of 405 companies were traded. At the end of the day, 145 stocks closed higher, 243 declined and 17 remained unchanged.

WorldCall Telecom was the volume leader with 50.2 million shares, losing Rs0.15 to close at Rs3.42. It was followed by Byco Petroleum with 47.1 million shares, gaining Rs0.09 to close at Rs9.99 and Unity Foods with 16.1 million shares, losing Rs0.28 to close at Rs40.3.

Foreign institutional investors were net sellers of Rs321.9 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.