Market watch: Bourse turns bearish, drops 636 points

Benchmark KSE-100 index declines 1.43% to settle at 43,731.2

KARACHI:

Bears staged a return at the Pakistan Stock Exchange on Thursday and dragged the KSE-100 index 636 points down amid stability in yields of T-bills in the latest auction.

In Wednesday’s auction, the cut-off yields remained flat across all tenors which dented investor sentiments as the market had expected a decline.

In addition, the 100 basis-point hike in the benchmark interest rate by the State Bank of Pakistan played on the minds of investors and they resorted to book profits.

After opening with minor ups and downs, the KSE-100 index dived as market participants offloaded their holdings and fell below 44,000 point barrier by midday. The decline gained pace in the final hour and accelerated the losses.

At close, the benchmark KSE-100 index recorded a decrease of 635.66 points, or 1.43%, to settle at 43,731.2.

A report from Arif Habib Limited stated that bears ruled over the bulls on Thursday as disappointment occurred from the auction of market treasury bills where cut-off yields remained flat across all tenors.

“Market opened on a bleak note as investors opted for profit booking but were unable to sell in the green zone,” it said. “Oil and gas marketing companies sector remained under pressure as petrol price decreased by 3.4% to Rs140.82 per litre, causing inventory loss to oil and gas marketing companies.”

Pharmaceutical sector stayed in the red zone as proposal on the cards of applicability of sales tax on the import of pharmaceutical active ingredients and local supply of medicines.

Main board activity remained dull, it said.

“On the flip-side, activity continued to remain sideways as market witnessed hefty volumes in the third tier stocks,” the report said.

JS Global analyst Muhammad Mubashir said that bourse opened on a positive note but all intra-day gains were wiped out eventually as investors chose to book profits.

KSE-100 closed at the level of 43,731, losing 636 points day-on-day.

Traded volume stood at 312 million shares with WorldCall Telecom (0.5%), Telecard Limited (6.6%), Byco Petroleum (-4.6%), TRG Pakistan (4.0%) and Unity Foods (5.6%) being the highest contributors.

“Going forward, we recommend investors adopt a buy on dip strategy in banking, exploration and production and cement sectors,” the analyst said.

Overall trading volumes decreased to 312.1 million shares compared with Wednesday’s tally of 398.1 million. The value of shares traded during the day was Rs10.1 billion.

Shares of 345 companies were traded. At the end of the day, 86 stocks closed higher, 248 declined and 11 remained unchanged.

WorldCall Telecom was the volume leader with 49.2 million shares, gaining Rs0.01 to close at Rs2.21. It was followed by Telecard Limited with 31 million shares, gaining Rs0.97 to close at Rs15.75 and Byco Petroleum with 19 million shares, losing Rs0.31 to close at Rs6.44.

Foreign institutional investors were net sellers of Rs351 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.