Market watch: Stocks plunge on falling rupee

Benchmark KSE-100 index dives 1,447.67 points to settle at 43,393.14

KARACHI:

Bears pushed bulls to the sidelines and dominated trading at the Pakistan Stock Exchange on Monday, as the benchmark KSE-100 index plummeted by 1,448 points after staying in the negative zone throughout the day.

Weakening macroeconomic indicators amid continuous depreciation of the rupee against the US dollar – which fell by around Re1 on Monday – instilled fear among market players and haunted the trading environment.

Consequently, the market participants rushed to offload their holdings as across-the-board profit-taking was witnessed during the session.

Moreover, depleting foreign exchange reserves amid political uncertainty in the country also dented the investors’ interest.

Earlier, the trading session commenced on a dull note, as the benchmark index registered a gradual decline in the initial hours.

The index remained in the negative zone throughout the day, and touched an intra-day low of 43,233 points during the second half. However, brief late-session buying activity helped the index to recoup some of the losses, but eventually it ended the day deep in the red.

At close, the benchmark KSE-100 index recorded a decline of 1,447.67 points, or 3.23%, to settle at 43,393.14 points.

Topline Securities, in its report, said that bears ruled the bourse as the benchmark KSE-100 index dropped by 3.23%.

The market opened on a negative note over unstable political and economic conditions, which led the index to hit an intra-day low of 1,607 points, it said.

“A selling spree was witnessed across the board, however, major laggards were cement, technology and bank stocks as Lucky Cement, Systems Limited and Habib Bank Limited closed lower,” Topline said.

A report of Arif Habib Limited stated that “the market witnessed a bloodbath throughout the day”, due to further devaluation of Pakistani rupee against the US dollar.

Uncertainty about debt repayments and depletion of foreign exchange reserves pushed investors to the sidelines as they awaited a positive trigger from the IMF through the resumption of its loan programme, it said.

The trading session remained dull and profit-selling was observed across the board. On the contrary, hefty volumes were noted in third-tier stocks.

Sectors contributing to the performance included banks (-305.1 points), cement (-237 points), technology (-183.2 points) and exploration and production (-130 points), the AHL report said.

JS Global analyst Mohammad Waqar Iqbal also said that a “bloodbath was witnessed” at the bourse. The KSE-100 index touched intra-day low of 1,608 points, but eventually settled at 43,393, losing 1,448 points as compared to the previous trading session.

Lotte Chemical Pakistan (+2.2%), Cnergyico PK (-9%), WorldCall Telecom (-6.5%), Telecard Limited (-7.3%) and Ghani Global Holdings (-7.5%) were the top contributors to the trading volume, he said.

“Going forward, the market sentiment appears weak and a cautious approach is recommended,” the analyst said.

Overall trading volumes increased to 305.2 million shares compared with Friday’s tally of 189.5 million. The value of shares traded during the day was Rs9.2 billion.

Shares of 363 companies were traded. At the end of the day, 38 stocks closed higher, 311 declined and 14 remained unchanged.

Lotte Chemical was the volume leader with 27 million shares, gaining Rs0.54 to close at Rs25.20. It was followed by Cnergyico PK with 23.9 million shares, losing Rs0.55 to close at Rs5.56 and WorldCall Telecom with 20.97 million shares, losing Rs0.11 to close at Rs1.57.

Foreign institutional investors were net sellers of Rs34.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.