Market watch: Stocks falter on macroeconomic concerns

Benchmark KSE-100 index drops 283.89 points to settle at 45,249.41

KARACHI:

Bears held their ground and dominated trading at the Pakistan Stock Exchange on Thursday as news reports regarding T-bill yields hitting a 24-year high dented investor interest, triggering across-the-board profit-selling.

The benchmark KSE-100 index, after remaining in the negative territory throughout the session, recorded a drop of around 284 points to settle in the red zone.

Moreover, fresh depreciation of the rupee against the US dollar also fuelled bearish sentiment at the bourse.

Earlier, the session commenced on a bleak note as the index touched an intra-day low of 44,657 points during the initial hours of trading.

However, the index started making a gradual recovery soon after, as market players opted to cherry-pick stocks at attractive valuations. Owing to that the index managed to recoup some of the losses in late hours of the session.

At close, the benchmark KSE-100 index recorded a decline of 283.89 points, or 0.62%, to settle at 45,249.41 points.

Topline Securities, in its report, said that selling pressure was observed in the market as investors reacted to the increase in T-bill yields in the range of 96-129 basis points. The KSE-100 index declined to touch an intra-day low of 876 points.

Some recovery was observed in the closing hours of the trade, where value investors came in to accumulate stocks, the report said.

“Hub Power Company, Fauji Fertiliser Company, TRG Pakistan, Systems Limited and Pakistan Petroleum Limited lost value, erasing 145 points from the index.”

During the trading hours, Lucky Cement announced third quarter 2021-22 (3QFY22) earnings per share of Rs23.41, Hub Power Company posted 3QFY22 earnings per share of Rs7.12, Packages Limited unveiled first quarter 2022 earnings per share of Rs43.06 and Systems Limited announced first quarter 2022 diluted earnings per share of Rs4.35, Topline said.

Apart from those, Nishat Mills announced unconsolidated 3QFY22 earnings per share of Rs9.8, Millat Tractors had unconsolidated 3QFY22 earnings per share of Rs20.6 (bonus issue of 20%) and Oil and Gas Development Company announced unconsolidated 3QFY22 earnings per share of Rs10.03 (interim dividend of Re1 a share).

A report of Arif Habib Limited stated that the market nosedived right from the opening due to T-bill yields that touched a 24-year high.

The benchmark KSE-100 index traded in the red zone throughout the day, as bears dominated the market and investors opted for profit-selling, it said.

“The session remained volatile as selling was observed across the board. However, hefty volumes were noted in third-tier stocks,” AHL said.

“Sectors contributing to the performance included technology (-56.9 points), fertiliser (-49.5 points), power (-46.5 points) and exploration and production (-43.7 points).”

JS Global analyst Neelam Naz said that the market faced another negative session as selling was observed across the board.

The index made a slight recovery by the end of the session to close at 45,249, down 284 points day-on-day, she said.

WorldCall Telecom (-1.2%), Cnergyico PK (-6.5%), Hum Network Limited (-2.6%), Pak Elektron Limited (+1.3%) and Pakistan Refinery Limited (+0.4%) were the volume leaders.

Major laggards were Hub Power Company, TRG Pakistan, Kohinoor Textile Mills, Pakistan Petroleum Limited and Fauji Fertiliser Company, she said.

“Major reason for the bearish market was increase in yields in the secondary market, which crossed 14%, indicating another policy rate hike in the upcoming monetary policy statement,” the analyst said, adding, “Going forward, we recommend investors to avail any downside as a buying opportunity with special focus on value stocks.”

Overall trading volumes increased to 325.5 million shares compared with Wednesday’s tally of 223.8 million. The value of shares traded during the day was Rs9.3 billion.

Shares of 340 companies were traded. At the end of the day, 93 stocks closed higher, 233 declined and 14 remained unchanged.

WorldCall Telecom was the volume leader with 37.5 million shares, losing Rs0.02 to close at Rs1.68. It was followed by Cnergyico PK with 34.7 million shares, losing Rs0.44 to close at Rs6.35 and Hum Network XD with 27.4 million shares, losing Rs0.2 to close at Rs7.62.

Foreign institutional investors were net buyers of Rs275.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.