Market watch: Stocks tumble on geopolitical shock

Benchmark KSE-100 index plunges 1,284.38 points to settle at 43,266.97

KARACHI:

Bears held sway at the Pakistan Stock Exchange on Monday as the benchmark KSE-100 index nosedived 1,284 points owing to escalating geopolitical tensions that sent prices of global commodities to multi-year highs.

The deteriorating situation between Russia and Ukraine disrupted global supplies, resulting in swelling of prices of crude oil and essential commodities, which reached record levels.

In line with the global equity markets, Pakistan’s bourse also felt the heat of disturbing developments as jittery investors opted to offload their holdings across many sectors.

In addition, the domestic political uncertainty amid fresh depreciation of the rupee added to the woes of investors and haunted the overall trading environment.

Moreover, market players were also observed taking a cautious approach ahead of monetary policy announcement on Tuesday.

Earlier, the trading began on a bleak note and the benchmark KSE-100 index took a deep plunge due to heavy profit-taking across the board. Just before midday, the KSE-100 index touched intra-day low of 43,051 points.

Throughout the day, the index remained in the negative zone with minor fluctuations. However, buying interest was noted in the final hour, which erased some of the losses.

At close, the benchmark KSE-100 index recorded a decline of 1,284.38 points, or 2.88%, to settle at 43,266.97 points.

A report of Arif Habib Limited stated that a bloodbath was observed at the bourse due to political unrest and an overheated commodities’ cycle.

“The market opened in the red zone and stayed under pressure throughout the day,” it said.

Across-the-board selling by institutional investors was witnessed. In the last trading hour, value buying was noted mainly in the exploration and production sector, the report said.

Sectors contributing to the performance included cement (-235 points), banks (-222 points), technology (-159 points), fertiliser (-98 points) and power (-91 points).

Topline Securities, in its report, said that Pakistan equities faced a selling spree across the board as Russia-Ukraine tensions deepened over the weekend.

Prices of global commodities (oil, coal, wheat and other major ones), which were already trading at multi-year highs, surged further due to the Moscow-Kyiv dispute.

Moreover, local political vibes regarding no-confidence vote against Prime Minister Imran Khan further pushed the stock market into the red, as the KSE-100 index settled at 43,267 points, the report said.

Cement, power, technology and bank sectors took the major hit, where Lucky Cement, Hub Power, TRG Pakistan, Systems Limited and Habib Bank Limited lost a cumulative 275 points.

On the flip side, National Foods, Adamjee Insurance and Dolmen City REIT registered some buying interest as they added 25 points to the index, the report added.

Overall trading volumes increased to 236.9 million shares compared with Friday’s tally of 134.8 million. The value of shares traded during the day was Rs8.2 billion.

Shares of 358 companies were traded. At the end of the day, 41 stocks closed higher, 301 declined and 16 remained unchanged.

Hum Network was the volume leader with 20.1 million shares, losing Rs0.41 to close at Rs6.79. It was followed by WorldCall Telecom with 11.5 million shares, losing Rs0.08 to close at Rs1.75 and Flying Cement (R) with 11.4 million shares, losing Rs0.19 to close at Rs0.48.

Foreign institutional investors were net sellers of Rs163.4 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.