Market watch: Bears hold sway as KSE-100 declines

Benchmark index falls 328.03 points to settle at 43,518.84

KARACHI:

Bears dominated at the Pakistan Stock Exchange on Thursday and pulled the KSE-100 index 328 points down owing to gloomy economic indicators.

The market is still reeling from the exceptionally high import figure that shook investor confidence. Moreover, participants expect no respite in December’s import number owing to weakening rupee coupled with climbing prices of commodities in the international market.

Hammering in the foreign exchange market continued as rupee extended decline and closed at historic low value on Thursday.

On the flip side, market rumours of drop in growth of remittances dimmed the market spirits further.

The fall was accelerated by Adviser to Prime Minister on Finance Shaukat Tarin’s warning to the commercial banks to end manipulation of treasury auctions to lend money to the government at higher rates.

Following a short-lived spike, the market erased the gains and entered the red zone in the first hour. From this point onward, the KSE-100 index fell steadily however, cherry picking from investors after midday, wiped out few of the losses.

At close, the benchmark KSE-100 index recorded a decrease of 328.03 points, or 0.75%, to settle at 43,517.84.

JS Global analyst Muhammad Mubashir said that profit taking continued across the board on Thursday as benchmark index closed at 43,519, a day-on-day decline of 328 points.

Market opened in the green zone and touched an intraday high of 43,997 but it was unable to maintain the momentum.

Traded volumes stood at 201mn shares with TRG Pakistan (1.4%), Telecard (-4.9%), Hascol (-5.5%), Pakistan Petroleum (4.2%) and WorldCall Telecom (-2.9%) being the highest contributors.

“On the economic front, the Asian Development Bank approved $603 million results-based lending program,” he said.

Meanwhile, rupee further depreciated to set a new record of Rs178.5 in the open market against the greenback.

“Going forward, we recommend investors to avail any downside as an opportunity to buy banking and exploration and production sector stocks,” he said.

A report from Arif Habib Limited stated that bears took over on Thursday due to volatility of rupee and expectations of higher interest rate in upcoming policy on December 14.

“Market opened negative but Oil and Gas Development Company and Pakistan Petroleum managed to win the show as investor participated in the stocks to avail big dividend on account of meaningful progress on possibility of resolution of gas circular debt in coming days,” it said.

Overall trading volumes fell to 200.5 million shares compared with Wednesday’s tally of 233.2 million. The value of shares traded during the day was Rs8.75 billion.

Shares of 332 companies were traded. At the end of the day, 72 stocks closed higher, 237 declined and 23 remained unchanged.

TRG Pakistan was the volume leader with 25.7 million shares, gaining Rs1.34 to close at Rs95.05. It was followed by Telecard Limited with 13.3 million shares, losing Rs0.76 to close at Rs14.81 and Hascol Petroleum with 12.5 million shares, losing Rs0.37 to close at Rs6.33.

Foreign institutional investors were net buyers of Rs162.5 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.