Market watch: Stocks falter on rate hike jitters

Benchmark KSE-100 index loses 123.06 points to settle at 43,395.78

KARACHI:

The Pakistan Stock Exchange on Friday experienced a depressed trading session as sceptical investors took a cautious stance ahead of the upcoming monetary policy announcement scheduled for December 14.

Lack of positivity combined with a poor macroeconomic outlook pulled the benchmark KSE-100 index down by another 123 points. Speculation about another policy rate hike in the monetary policy statement dented investor confidence and they opted to stay on the sidelines.

Moreover, fluctuations in the value of Pakistani rupee against the US dollar further marred the trading environment.

Following a positive start, the KSE-100 index dropped in initial trading mainly due to the dearth of positive triggers. Cherry-picking erased some of the losses by the end of first half of Friday’s session.

However, uncertainty shrouded the index in the second half as the market registered minor ups and downs by the end of trading.

At close, the benchmark KSE-100 index recorded a decline of 123.06 points, or 0.28%, to settle at 43,395.78.

A report of Arif Habib Limited stated that the market continued to remain in the bearish zone due to concerns over the economic outlook, further devaluation of Pakistani rupee and a hawkish stance in the upcoming monetary policy. “Activity remained dull,” it said.

In the first half, the market opened on a bleak note and mostly cyclical stocks came under the knife, whereas in the second half, across-the-board selling was witnessed due to the lack of positive triggers.

“Moving forward, we expect the market to remain volatile and recommend a cautious approach,” the analyst said.

JS Global analyst Muhammad Mubashir said that the bourse remained under pressure throughout the day due to the lack of positive triggers, while investors continued to book profit.

Healthy participation was witnessed in TRG Pakistan after material information about the allocation of liquid assets was shared by the company.

Traded volumes stood at 179 million shares, with TRG Pakistan (+1.5%), Treet Corporation (-0.7%), WorldCall Telecom (-5.5%), Hascol Petroleum (-2.5%) and TPL Properties (-7%) being the highest contributors.

Sectors contributing to the performance included exploration and production (-37 points), technology and communication (-33 points), commercial banks (-33 points), textile composite (-17 points) and power companies (-15 points).

“Going forward, we expect range-bound activity to continue and recommend investors to avail any downside as an opportunity to buy in banking and exploration and production sectors,” the analyst said.

Overall trading volumes decreased to 179.2 million shares compared with Thursday’s tally of 200.5 million. The value of shares traded during the day was Rs6.7 billion.

Shares of 324 companies were traded. At the end of the day, 123 stocks closed higher, 183 declined and 18 remained unchanged.

TRG Pakistan was the volume leader with 14.6 million shares, gaining Rs1.39 to close at Rs96.44. It was followed by Treet Corporation with 14.2 million shares, losing Rs0.28 to close at Rs40.12 and WorldCall Telecom with 13.6 million shares, losing Rs0.11 to close at Rs1.88.

Foreign institutional investors were net sellers of Rs135.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.