Market watch: KSE-100 dips amid thin volumes

Benchmark index sheds 286.44 points to settle at 43,366.89

KARACHI:

The Pakistan Stock Exchange endured a lacklustre trading session on Monday, as the benchmark KSE-100 index succumbed to across-the-board selling pressure in the absence of positive triggers and closed in the red.

Persistent volatility on the international and domestic fronts continued to haunt the overall trading environment in the market.

Jittery investors weighed the impact of ongoing political turmoil in the country coupled with swelling global commodity prices, fearing macroeconomic instability.

As a result, market players mainly opted to stay on the sidelines as the trading volume and value remained thin on the first day of the week.

Moreover, fresh depreciation of the rupee against the US dollar to a record low at Rs178.98 in the interbank market added to the woes of investors.

Earlier, the trading session kicked off on a positive note, as the benchmark index touched an intra-day high of 43,768 points in initial dealings.

Later, the index began to tread towards south with minor fluctuations in the absence of any positive developments. A selling spree during the final hour further pulled the index down, which ended the trading session in the negative territory.

At close, the benchmark KSE-100 index recorded a decline of 286.44 points, or 0.66%, to settle at 43,366.89 points.

A report of Arif Habib Limited stated that a range-bound session was observed at the bourse due to political uncertainty.

“The market opened in the green zone and stayed volatile throughout the day. Main board activity remained dull,” it said.

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

In the last trading hour, across-the-board selling was witnessed, which led the index to close in the red zone, the report said.

Sectors contributing to the performance included exploration and production (-58 points), banks (-57 points), cement (-56.5 points), technology (-52 points) and power (-29 points).

Topline Securities, in its report, said that Pakistan equities closed on a negative note as lacklustre activity was witnessed throughout the day.

“Uncertainty about local politics and higher international commodity prices kept investor confidence in check,” it said.

Investor interest was mostly witnessed in the fertiliser sector over increasing urea prices, where Engro Fertilisers, Fauji Fertiliser Company and Fauji Fertiliser Bin Qasim closed at higher levels.

“Pakistan Stock Exchange recorded the lowest volume in 20 months at 114 million shares,” the report said, adding that on June 5, 2020 it touched the level of 89 million shares.

JS Global analyst Mubashir Anis Naviwala said that the downtrend continued as the benchmark KSE-100 index closed at 43,367 points. Profit-taking continued across the board and throughout the day.

Ghani Global Holdings (-4.2%), Telecard Limited (-8.4%), TPL Properties (-3.3%), WorldCall Telecom (-1.2%) and Engro Fertilisers (+3.3%) were the volume leaders.

“Going forward, we expect range-bound activity to continue due to concerns over the economic outlook and geopolitical situation,” the analyst said.

“We recommend investors to avail any downside as an opportunity to buy in banking and exploration and production sectors,” he added.

Overall trading volumes dropped to 115.1 million shares compared with Friday’s tally of 149.3 million. The value of shares traded during the day was Rs3.6 billion.

Shares of 334 companies were traded. At the end of the day, 79 stocks closed higher, 242 declined and 13 remained unchanged.

Flying Cement (R) was the volume leader with 11.6 million shares, losing Rs0.1 to close at Rs0.16. It was followed by Pak Elektron (R) with 8.1 million shares, gaining Rs0.18 to close at Rs2 and Ghani Global Holdings with 7 million shares, losing Rs0.64 to close at Rs14.68.

Foreign institutional investors were net buyers of Rs96.32 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.