Market watch: Stocks dive on geopolitical tensions

Benchmark KSE-100 index sheds 435.28 points to settle at 45,644.09

KARACHI:

The Pakistan Stock Exchange came under selling pressure on Monday as investors took cue from the surging global crude oil prices amid rising geopolitical tensions, which sparked fears of increase in inflation in the country in the wake of expensive imports.

The benchmark KSE-100 index spent most of the day in the red zone and ended with a drop of 435 points, commencing the week on a negative note.

In line with the sell-off observed in global equities, Pakistan’s bourse dived owing to across-the-board profit-taking.

Index heavyweight sectors including technology, banking and fertiliser remained under pressure. Cement sector continued to bear the brunt of rising global coal prices.

Moreover, fresh depreciation of the rupee against the US dollar also dented the confidence of market players.

Earlier, the trading session kicked off with a brief rally, which pushed the index to an intra-day high of 46,134 points. However, from that level onwards, it started the journey towards south and stayed in the negative territory.

During the second half, the index touched an intra-day low of 45,507 points. But late session value hunting by the investors erased some of the losses.

At close, the benchmark KSE-100 index recorded a decline of 435.28 points, or 0.94%, to settle at 45,644.09.

Technology, banking, fertiliser and cement sectors witnessed selling pressure as Systems Limited, Fauji Fertiliser Company, Meezan Bank and Lucky Cement contributed negatively by collectively losing 124 points, a report of Topline Securities said.

However, Mari Petroleum, Sui Northern Gas Pipelines and Engro Polymer and Chemicals added a cumulative 34 points to the index, the report added.

Arif Habib Limited, in its report, stated that the stock market faced heavy selling after crude oil prices surged to a seven-year high in the international market amid intensifying tensions between Ukraine and Russia.

Cement sector remained under pressure due to higher international coal prices. Across-the-board selling was recorded with investors opting for a risk-averse approach, the report said.

Mainboard activity remained dull. On the flip side, activity continued to remain sideways as the market witnessed hefty volumes in third-tier stocks.

Sectors contributing to the performance included commercial banks (-77 points), technology (-63 points), fertiliser (-54 points), cement (-43 points) and engineering (-32 points).

JS Global analyst Waqar Iqbal said that the benchmark KSE-100 index closed at 45,644, down 435 points compared to the previous trading session.

“The market started on a bearish note amid news of higher oil prices and the Ukraine-Russia conflict,” he said. “The index is set to regain confidence once commodity prices come down.”

Top volume leaders of the day were WorldCall Telecom, Telecard Limited, Ghani Global Holdings, TRG Pakistan and TPL Properties.

“Going forward, the market is likely to trade sideways with low volumes, hence, it is recommended to book profits at current levels,” he added.

Overall trading volumes increased to 187.8 million shares compared with Friday’s tally of 170.6 million. The value of shares traded during the day was Rs5.9 billion.

Shares of 349 companies were traded. At the end of the day, 58 stocks closed higher, 273 declined and 18 remained unchanged.

WorldCall Telecom was the volume leader with 33.5 million shares, losing Rs0.1 to close at Rs2.05. It was followed by Telecard Limited with 9.9 million shares, losing Rs1.05 to close at Rs16.32 and Ghani Global Holdings with 7.8 million shares, losing Rs1.28 to close at Rs20.50.

Foreign institutional investors were net sellers of Rs27.32 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan