Market watch: Stocks dive on Covid fears, oil price rout

Benchmark KSE-100 index falls 366.33 points to settle at 47,123.62

KARACHI:

The Pakistan Stock Exchange (PSX) extended the decline on Monday with a loss of over 350 points as it was held hostage to the gnawing fear of the fourth wave of Covid-19 and uncertainty in the global oil market.

International oil prices fell 4%, extending last week’s steep losses on the back of a rising US dollar and concerns that new coronavirus-related restrictions in Asia, especially China, could slow the global recovery in fuel demand.

The benchmark KSE-100 index moved in a wide range with intra-day high and low of 47,623.44 and 47,053.96 points.

On the results front, Lucky Cement announced its financial result, posting full-year earnings per share of Rs70.69, but skipped dividend payment for the April-June quarter, which weakened investor sentiment.

In addition, expectations about the upcoming economic data kept playing on investors’ mind and they treaded cautiously while making investment decisions.

At close, the benchmark KSE-100 index recorded a decrease of 366.33 points, or 0.77%, to settle at 47,123.62.

Arif Habib Limited, in its report, stated that the market took a negative turn, primarily due to sell-off in the technology sector.

“Institutional investors were on the selling side, partly due to redemptions and also due to concerns over the rising current account deficit and inflation on the back of possible tariff hike,” it said.

Technology, construction and steel sectors were the major losers, whereas other sectors also bore the brunt of selling because of weak sentiment. Some prominent stocks which held their ground included UBL, MCB and Pakistan Oilfields.

Sectors contributing to the performance included cement (-87 points), technology (-69 points), power (-30 points), fertiliser (-29 points) and oil and gas marketing companies (-25 points).

Individually, stocks that contributed positively to the index included MCB (+13 points), Habib Metropolitan Bank (+9 points), Highnoon Laboratories (+4 points), FrieslandCampina Engro Pakistan (+4 points) and Abbott Laboratories (+3 points).

Stocks that contributed negatively were TRG Pakistan (-55 points), Lucky Cement (-42 points), Hubco (-27 points), Engro (-24 points) and Ghani Glass (-17 points).

JS Global analyst Neelum Naz said as anticipated the KSE-100 index lost further ground due to the ongoing pandemic situation in the country, eventually closing 366 points below Friday’s close at 47,124.

Major volume contributors were WorldCall Telecom (-3.7%), Fauji Foods (-7.4%), Ghani Global Holdings (-7.4%), Byco Petroleum (+0.3%), Telecard Limited (-5.4%) and Unity Foods (-1.4%).

“Going forward, the benchmark index can further slide down in the coming days. We recommend investors to adopt a buy-on-dip strategy in steel, technology, refinery and cement sectors,” the analyst said.

Overall trading volumes fell to 337.3 million shares compared with Friday’s tally of 499.7 million. The value of shares traded during the day was Rs11.3 billion.

Shares of 469 companies were traded. At the end of the day, 73 stocks closed higher, 372 declined and 24 remained unchanged.

WorldCall Telecom was the volume leader with 42.2 million shares, losing Rs0.13 to close at Rs3.36. It was followed by Fauji Foods with 17.4 million shares, losing Rs1.62 to close at Rs20.13 and Ghani Global Holdings with 17.3 million shares, losing Rs3.15 to close at Rs39.50.

Foreign institutional investors were net buyers of Rs212.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.