Market watch: Stock market erases gains to end negative

Benchmark KSE-100 index drops 324.27 points to settle at 43,786.83

KARACHI:

Volatile trading continued at the Pakistan Stock Exchange on Thursday as the KSE-100 index offloaded over 300 points on the back of political turmoil, weakening economic cues and uncertainty about the future leadership.

Investors awaited the Supreme Court ruling regarding the legitimacy of National Assembly deputy speaker’s remarks and sold their stockholdings.

Moreover, the rupee fared no better and sank further to a new all-time low, which dented investor interest at the bourse. Anticipation of further increase in the overall inflation reading triggered a selling spree and caused bearish pressure.

Earlier, the trading session kicked off on a positive note but the KSE-100 index soon receded as investors were concerned about Pakistan’s economy. With weak sentiment, the market entered the negative zone and remained there for the remaining part of the session.

At close, the benchmark KSE-100 index lost 324.27 points, or 0.74%, to settle at 43,786.83 points.

A report of Arif Habib Limited stated that another volatile day was observed at the Pakistan Stock Exchange as the KSE-100 index opened positive but was unable to remain in the green zone due to political chaos, rising T-bill yields and rupee devaluation against the US dollar.

Cement sector was under pressure throughout the day. Across-the-board profit-selling was witnessed in the last trading hour, which led the index to close in the red zone, it said.

JS Global analyst Neelam Naz said that the KSE-100 index kicked off trading on a positive note, touching an intra-day high of 44,350 points, but later faced a downturn due to selling pressure. It closed at 43,787, down 324 points day-on-day.

Total traded volume stood at 141 million shares where Ghani Global Holdings (+2%), Pak Elektron (+1.7%), K-Electric (-0.3%), Telecard Limited (-0.7%) and Ghani Global Glass (+3.9%) were the major contributors.

UBL, Highnoon Laboratories, Hubco, Meezan Bank and Engro Polymer and Chemicals were the main laggards, she said.

Market participants were mainly sellers amid uncertainty about the pending Supreme Court verdict regarding legitimacy of deputy speaker’s ruling, the analyst said.

On the other hand, the local currency remained under pressure, dampening market sentiment as the dollar climbed above Rs188.

“Going forward, we recommend investors to stay cautious and wait for major dips to avail any downside as a buying opportunity in value stocks,” the analyst said.

Overall trading volumes increased to 141 million shares compared with Wednesday’s tally of 108.4 million. The value of shares traded during the day was Rs4.98 billion.

Shares of 308 companies were traded. At the end of the day, 93 stocks closed higher, 193 declined and 22 remained unchanged.

Ghani Global Holdings was the volume leader with 11.1 million shares, gaining Rs0.33 to close at Rs16.50. It was followed by Pak Elektron Limited with 9.2 million shares, gaining Rs0.27 to close at Rs16.55 and K-Electric with 7.7 million shares, losing Rs0.01 to close at Rs2.90.

Foreign institutional investors were net sellers of Rs22.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.