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KARACHI: The stock market extended its fall on Tuesday as the benchmark index tumbled almost 600 points in intra-day trading before recouping some of the losses. It still closed the day below 38,000 points.
The market resumed its downward journey from the very moment the trading began. Although activity picked up compared to the preceding session, the negative performance of the energy sector cast a pall over the market and dragged the index down.
At the end of trading, the benchmark KSE 100-share Index registered a decrease of 464.56 points or 1.21% to settle at 37,919.42.
According to Elixir Securities’ analyst Murtaza Jafar, Pakistan equities extended the decline with the KSE-100 Index settling down by 465 points whereas 109 million shares changed hands.
“A major drag came from the energy sector as sentiments were dented after the prime minister advised the power ministry to completely phase out furnace oil-based power generation going forward due to its fallout on the environment,” Jafar said.
Kot Addu Power Company (-5%), Attock Refinery (-4.7%) and National Refinery (-5%) traded at their respective lower price limits while Pakistan State Oil (-2.8%) that had a 75% share in the furnace oil market also came under pressure.
Meanwhile, on the corporate front, Nishat Mills (-1.6%) reiterated its intention of offering 18% stake to Millat Tractors (-0.6%) in its newly formed subsidiary Hyundai Nishat Motors.
“[We] expect the market to be driven by political noise in the near term as the Pakistan Awami Tehreek announces it will give a future roadmap by the end of December,” the analyst added.
JS Global analyst Maaz Mulla said once again the KSE-100 Index succumbed to the pressure, dropping below 38,000 points as bears refused to retreat to the sidelines amidst current political unease.
The market started off on a lacklustre note to hit an intra-day high of +59 points, but it immediately gave up the gains and hit an intra-day low of -616 points to finally close at 37,919.
“Lack of participation from local institutions was seen in the exploration and production sector where Pakistan Oilfields (-1.46%), Pakistan Petroleum (-0.76%) and Oil and Gas Development Company (-0.76%) closed negative,” Mulla said.
Pressure was seen in the cement sector as well due to increasing international coal prices.
Maple Leaf Cement (-3.74%), Fauji Cement (-4.44%) and DG Khan Cement (-2.69%) closed in the red whereas Lucky Cement (+1.20%) stood in the green as its brownfield expansion of 1.30 million tons came on line, restoring its position as the largest cement producer in the country in terms of installed capacity.
In the banking space, Habib Bank (+0.96%), United Bank (+1.25%) and Meezan Bank (+0.49%) gained as some value buyers jumped in to take advantage of the weak price levels.
“Moving forward, we expect the market to remain negative on the back of political jitters and lack of triggers. We recommend investors to stay cautious,” he added.
Overall, trading volumes increased to 108 million shares compared with Monday’s tally of 50 million.
Shares of 340 companies were traded. At the end of the day, 50 stocks closed higher, 271 declined while 19 remained unchanged. The value of shares traded during the day was Rs4.7 billion.
WorldCall Telecom was the volume leader with 15.8 million shares, gaining Rs0.03 to close at Rs2.90. It was followed by K-Electric Limited with 11.1 million shares, losing Rs0.04 to close at Rs6.04 and TRG Pakistan with 10.5 million shares, losing Rs1.45 to close at Rs27.60.
Foreign institutional investors were net sellers of Rs102 million during the trading session, according to data compiled by the National Clearing Company of Pakistan.