Stocks dive amid economic concerns

Benchmark KSE100 index drops 421.27 points to settle at 41,013.86

KARACHI:

The Pakistan Stock Exchange continued its journey south on Thursday and fell over 400 points owing to weak economic cues.

Growing political turbulence coupled with a gloomy forecast about the impact of flash floods on the economy weakened investor interest in stock purchases.

Adding fuel to the fire, reports of Habib Bank Limited (HBL) – the top commercial bank in the private sector – facing a terror financing case in the US hammered investor confidence.

Owing to the negative triggers, market participants opted to stay on sidelines and resorted to across-theboard selling due to which banking and technology stocks ended the day with substantial losses.

A bearish spell denominated trading and the market remained under pressure throughout the day. Investor sentiment did not improve despite the rupee’s recovery against the US dollar.

At close, the benchmark KSE-100 index recorded a decrease of 421.27 points, or 1.02%, to settle at 41,013.86.

Topline Securities, in its report, said that Pakistan equities had a bearish day.

The market opened on a negative note on account of Bloomberg’s news regarding a local bank facing complaints in a terrorism case in US court. The development dented the recent bullish momentum.

During the session, the index hit intra-day low of 40,910 (-524 points, or 1.26%) where value hunting resumed, which assisted the KSE-100 index to settle at 41,014 (-421 points, or 1.02%), it said. Bank and tech-sector stocks contributed negatively to the index where Habib Bank, United Bank, TRG Pakistan, Meezan Bank and Systems Limited lost 237 points cumulatively.

On the flip side, Lucky Cement, Nishat Chunian and Shell Pakistan witnessed some buying interest as they added 29 points collectively.

Over 127 million shares were traded at the bourse while total value came in at Rs5.5 billion. K Electric led the volumes chart with trading in 11.1 million shares, Topline added.

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A report of Arif Habib Limited stated that the benchmark KSE-100 index witnessed a “bloodbath session” due to the current political clamour and negative news pertaining to Habib Bank.

As investors opted to remain on the sidelines because of a hazy economic forecast, the market opened in the red and remained under pressure for the rest of the day, touching intra-day low of -524.31 points.

Volumes declined significantly across the main board while on the contrary decent volumes were observed in third-tier stocks, it said.

The index closed at 41,013.86, down 421.27 points (-1.02%). Sectors contributing to the performance included banks (-246.8 points), technology (-53 points), E&P (-26.8 points), chemical (-21.7 points) and fertiliser (-17.8 points). Volumes decreased from 220.6 million shares to 127.4 million shares (-42.2%). Traded value decreased 31.3% to $24 million against $35 million a day ago.

JS Research analyst Sara Saeed said the KSE-100 index experienced a bearish momentum, ending the day at 41,014, down 421 points.

Volumes remained low with 127 million shares traded. Major activity was witnessed in K-Electric (-1.6%), TPL Properties (-2.8%), TRG Pakistan (-1.9%), Nishat Chunian (4.8%) and Fauji Cement (-0.7%).

“Going forward, we recommend investors to stay cautious and wait for clarity in market sentiment before considering the downside as a buying opportunity,” said the analyst.

Overall trading volumes decreased to 127.4 million shares compared with Wednesday’s tally of 220.6 million. The value of shares traded during the day was Rs5.5 billion. Shares of 324 companies were traded.

At the end of the day, 103 stocks closed higher, 194 declined and 27 remained unchanged. K-Electric was the volume leader with 11.2 million shares, losing Rs0.05 to close at Rs3.

It was followed by TPL Properties with 9.98 million shares, losing Rs0.61 to close at Rs20.86 and TRG Pakistan with 7.8 million shares, losing Rs2.38 to close at Rs122.92.

Foreign investors were net sellers of Rs1.01 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.