Market watch: Bears pull stocks down ahead of MPC meeting

Benchmark KSE-100 index plunges 519.41 points to settle at 42,876.37

KARACHI:

Bears maintained their hold over the Pakistan Stock Exchange on Monday as they pulled the benchmark KSE-100 index below 43,000 points, which came just a day before the announcement of monetary policy.

The index plunged over 500 points in its fourth consecutive session in the red.

Fears of another policy rate hike in the upcoming Monetary Policy Committee (MPC) meeting, scheduled for Tuesday, forced cautious investors to stay on the sidelines.

The trading mood remained depressed throughout the day owing to macroeconomic concerns, which were reflected in the low trading volume and value.

Further depreciation of the rupee against the US dollar sparked pessimism among market participants, who then opted to tread cautiously.

Following a brief rally in the morning, the KSE-100 index registered a decline in the initial hours as fears of another interest rate hike dented the confidence of investors.

Later, the index remained range bound and recorded minor ups and downs. However, selling pressure emerging towards the end dragged the market further down.

At close, the benchmark KSE-100 index recorded a decrease of 519.41 points, or 1.2%, to settle at 42,876.37.

A report of Arif Habib Limited stated that the market continued to remain in the red zone due to concerns over mounting inflation and a hawkish stance in the upcoming monetary policy.

Trading activity remained lacklustre, it said. The market opened on a bleak note and mostly cyclical stocks remained under pressure throughout the day.

In the last trading hour, across-the-board selling was witnessed due to the lack of any positive triggers.

Sectors contributing to the performance included technology and communication (-147 points), exploration and production (-88 points), commercial banks (-72 points), cement (-28 points) and pharmaceutical (-27 points).

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

JS Global analyst Muhammad Mubashir said that market sentiment continued to remain bearish due to concerns over the economic outlook, further monetary tightening and geopolitical situation.

The market touched intra-day high of 43,478, however, it closed at 42,876, losing 519 points.

Market volume stood at 150 million shares with WorldCall Telecom (-9.6%), Byco Petroleum (-0.5%), Fatima Fertiliser (-0.7%), TRG Pakistan (-6.9%) and Hascol Petroleum (-5.2%) being the highest contributors.

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

Overall trading volumes decreased to 150.4 million shares compared with Friday’s tally of 179.2 million. The value of shares traded during the day was Rs5.3 billion.

Shares of 331 companies were traded. At the end of the day, 65 stocks closed higher, 250 declined and 16 remained unchanged.

WorldCall Telecom was the volume leader with 18.3 million shares, losing Rs0.18 to close at Rs1.7. It was followed by Byco Petroleum with 7.3 million shares, losing Rs0.03 to close at Rs5.65 and Fatima Fertiliser with 7 million shares, losing Rs0.24 to close at Rs34.76.

Foreign institutional investors were net buyers of Rs586.68 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.