Market watch: KSE-100 slides on Pakistan’s inclusion in FM index

The Pakistan Stock Exchange on Wednesday succumbed to selling pressure, fuelled by MSCI’s downgrade of Pakistan to Frontier Markets from Emerging Markets, which dented investor interest.

Resultantly, the KSE-100 index slid 333 points as market atmosphere remained gloomy throughout the session.

Index-heavy sectors including automobile, oil, cement and bank experienced heavy selling as weak investor spirits triggered a sell-off at the bourse.

Following a brief open in the positive, the index began declining in the initial minutes. Market participants resorted to cherry-picking at midday and helped wipe off some of the losses. However, their effort proved futile due to late session selling, which accelerated the downtrend.

At close, the benchmark KSE-100 index recorded a decrease of 333.25 points, or 0.71%, to settle at 46,396.71.

JS Global analyst Maaz Mulla said that the KSE-100 index recorded a volatile session, marking a high and low of 46,875 and 46,310 points, respectively.

A significant selling pressure was seen in the market due to the MSCI reclassification under which Pakistan’s bourse would be placed in Frontier Markets compared to the existing standing in Emerging Markets.

The cement sector continued to lose ground due to pressure from rising coal prices. Kohat Cement (-5.3%), Lucky Cement (-3.9%), Thatta Cement (-4.7%), Flying Cement (-3.5%) and Pioneer Cement (-3%) closed in the red.

Moreover, Pakistan Petroleum (-1.1%) and Oil and Gas Development Company (-2.7%) from the exploration and production sector closed lower, in line with the fall in crude oil prices in the international market.

 “Going forward, we recommend investors to remain cautious and wait for significant dips for further buying,” the analyst said.

Overall trading volumes rose to 477.9 million shares compared with Tuesday’s tally of 423.8 million. The value of shares traded during the day was Rs14.7 billion.

Shares of 524 companies were traded. At the end of the day, 160 stocks closed higher, 344 declined and 20 remained unchanged.

TPL Corp was the volume leader with 39 million shares, gaining Rs0.24 to close at Rs25.52. It was followed by Telecard Limited with 37.4 million shares, gaining Rs1.54 to close at Rs23.11 and Ghani Global Holdings with 35.4 million shares, gaining Rs3.37 to close at Rs48.39.

Foreign institutional investors were net sellers of Rs273.9 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.