Market watch: Bull-run ends with 300-point drop at PSX
The Pakistan Stock Exchange (PSX) on Wednesday succumbed to selling pressure after closing positive for five consecutive sessions and lost 300 points in topsy-turvy trading.
The benchmark KSE-100 index traded between hope and despair, which eventually let loose the bears, who pulled the bourse into the red.
Investors kept a close watch on political news after Pakistan Tehreek-e-Insaf (PTI) leader Jahangir Tareen appeared before court in Lahore in a money laundering case.
Moreover, concerns over the upcoming monetary policy, scheduled to be announced in the current month, rising number of coronavirus cases and uncertainty ahead of the federal budget for fiscal year 2021-22 (due next month) caused jitters in the stock market.
Weakening crude oil prices in the international market took a toll on the local bourse, but positive activity was fuelled by encouraging macros, which included historic high remittances for April 2021 and upbeat car sales data.
The KSE-100 index opened lower, but it made frequent gains at regular intervals. The downtrend turned steeper at midday as the index once again failed to breach the 46,000-point mark.
At close, the benchmark KSE-100 index recorded a decrease of 299.71 points, or 0.65%, to settle at 45,682.11 points.
In its report, Arif Habib Limited stated that the market turned negative, which was a reflection of the political uncertainty created by the rift among senior members of the ruling party.
The KSE-100 index retreated 369 points during the day and ended down by 300 points. Cement, oil and gas marketing, bank, refinery and steel stocks faced selling pressure.
However, the sentiment turned particularly negative due to persistent selling in technology stocks.
Sectors contributing to the performance included technology (-83 points), cement (-72 points), banks (-53 points), textile (-29 points) and oil and gas marketing companies (-24 points).
Individually, stocks that contributed positively to the index included Mari Petroleum (+16 points), Hascol Petroleum (+14 points), K-Electric (+14 points), Oil and Gas Development Company (+13 points) and Engro Corporation (+10 points).
Stocks that contributed negatively were TRG Pakistan (-70 points), Lucky Cement (-24 points), HBL (-23 points), Pakistan State Oil (-22 points) and Hubco (-22 points).
JS Global analyst Neelum Naz said that, as expected, the market saw aggressive selling around the 46,000-point mark. It closed the session at 45,682, down 300 points.
Total traded volume stood at 578 million shares with major contribution coming from K-Electric (+5.4%), Unity Foods (-1.5%), Hascol Petroleum (+10.7%), WorldCall Telecom (+1.8%) and Telecard Limited (-4.1%).
On the news front, the political noise arising from the split in the ruling Pakistan Tehreek-e-Insaf led to negative sentiment in the market.
“Going forward, a buy-on-dips strategy is advised in the coming sessions, especially in blue chip stocks trading at deep discounts,” the analyst said.
Overall trading volumes rose to 578.3 million shares compared with Tuesday’s tally of 536.8 million. The value of shares traded during the day was Rs20.8 billion.
Shares of 398 companies were traded. At the end of the day, 148 stocks closed higher, 234 declined and 16 remained unchanged.
K-Electric was the volume leader with 65.4 million shares, gaining Rs0.21 to close at Rs4.11. It was followed by Unity Foods with 56.9 million shares, losing Rs0.63 to close at Rs40.62 and Hascol Petroleum with 44.1 million shares, gaining Re1 to close at Rs10.31.
Foreign institutional investors were net sellers of Rs6.4 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.