Market watch: Soaring energy prices drag stocks down

Benchmark KSE-100 index falls 289.46 points to settle at 44,514.12

KARACHI:

Bears returned to the Pakistan stock market on Wednesday as the KSE-100 index dipped nearly 300 points, driven down by the spike in global energy prices with no signs of easing of geopolitical tensions.

A surge in international crude oil prices past the $110-per-barrel mark sparked concern as it would pile on pressure on the current account as well as the rupee. Fears of deterioration in economic indicators dampened investor interest in the market.

Automobile, cement, refinery and oil marketing sectors faced sell-off and all of them closed mostly in the red.

Earlier, trading kicked off with a dip, however, the market staged recovery towards midday and erased some of the losses by the end of trading.

At close, the benchmark KSE-100 index recorded a decrease of 289.46 points, or 0.65%, to settle at 44,514.12 points.

A report of Arif Habib Limited stated that another bearish session was witnessed at the Pakistan Stock Exchange due to a significant hike in global commodity prices.

“Cement sector faced a major correction due to the spike in international coal prices, whereas good investor participation was observed in exploration and production and oil marketing companies’ stocks as international oil prices touched the high of $111.47,” it said.

“Healthy participation was observed during the day as value investors accumulated blue-chip stocks across the board.”

JS Global analyst Mubashir Anis Naviwala stated that the market started off on a very dull note but the KSE-100 index partially recovered towards the end of trading session, eventually closing at 44,514, a drop of 289 points day-on-day.

Volumes stood at 235 million shares where TRG Pakistan (+5.8%), Telecard Limited (-2%), Hum Network (+3.3%), WorldCall Telecom (-3.1%) and Agritech Limited (+4.3%) were the top contributors.

“Going forward, we recommend investors to wait before taking any fresh buying positions,” the analyst said.

Overall trading volumes dropped to 235 million shares compared with Tuesday’s tally of 309.3 million. The value of shares traded during the day was Rs9.3 billion.

Shares of 354 companies were traded. At the end of the day, 114 stocks closed higher, 215 declined and 25 remained unchanged.

TRG Pakistan was the volume leader with 21.9 million shares, gaining Rs4.29 to close at Rs78.72. It was followed by Telecard Limited with 15.1 million shares, losing Rs0.3 to close at Rs14.66 and Hum Network with 12.8 million shares, gaining Rs0.24 to close at Rs7.41.

Foreign institutional investors were net sellers of Rs15.47 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.