Market watch: KSE-100 extends losses, falls below 45,000 points

Benchmark index plunges 796.48 points to settle at 44,948.52

KARACHI:

The Pakistan Stock Exchange witnessed another round of thrashing on Tuesday as investors continued to mourn the higher-than-expected interest rate hike, of 150 basis points, by the State Bank of Pakistan.

The benchmark KSE-100 index slumped over 700 points for the second consecutive day to tumble below the 45,000 point level.

Taking cue from the gloomy macroeconomic outlook, bulls chose to remain on the sidelines while bears dominated the market.

Speculations over stringent conditions laid down by the International Monetary Fund (IMF) to release the next tranche of the loan, including higher power tariff and taxes, instilled fears among investors and triggered across the board selloff at the bourse.

The surge in foreign debt to $3.8 trillion in the first four months of the ongoing fiscal year coupled with foreign selling further dented the confidence of the market participants.

Trading began with a short-lived rally as the index failed to sustain its upward march and succumbed to the selling pressure. The market remained in the red zone for the rest of the session and fell steadily until close.

At close, the benchmark KSE-100 index recorded a decline of 796.48 points, or 1.74%, to settle at 44,948.52.

A report from Arif Habib Limited stated that the bears ruled over the bulls again on Tuesday as investors were unable to digest the hawkish stance of the last MPC which resulted in double digit six-month Kibor.

Hefty increase in the finance cost of leveraged businesses will eventually lower profits as a major portion of borrowing appears from Kibor led lending.

The second day of roll-over week became under pressure as investors took a cautious side and opted for squaring of roll-over positions.

In the last trading hour, a bloodbath session was witnessed as selling came across the board.

Sectors contributing to the performance include technology (-178 points), cement (-145 points), commercial banks (-94 points), exploration and production (-64 points) and oil marketing companies (-44 points).

JS Global analyst Neelam Naz said that the market witnessed another bloodbath, shedding 796 points to close at 44,948 level.

Major contributions in volume came from TRG Pakistan Limited (-7.5%), WorldCall Telecom (-2.7%) and Byco Petroleum (-4.5%).

Overall investor participation at the bourse remained sluggish amid ongoing rollover week.

“Going forward, the market may likely consolidate amid uncertainty and lack of positive triggers, therefore, investors are advised to wait for dips in the market to take position in blue chip stocks mainly banking, fertiliser and power sector,” the analyst said.

Overall trading volumes rose to 264.61 million shares compared with Monday’s tally of 261.9 million. The value of shares traded during the day was Rs9.73 billion.

Shares of 358 companies were traded. At the end of the day, 49 stocks closed higher, 297 declined and 12 remained unchanged.

TRG Pakistan Limited was the volume leader with 19.63 million shares, losing Rs7.16 to close at Rs88.35. It was followed by WorldCall Telecom with 17.17 million shares, losing Rs0.06 to close at Rs2.17 and Byco Petroleum with 13.76 million shares, losing Rs0.31 to close at Rs6.52.

Foreign institutional investors were net sellers of Rs744.72 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.