Stock market sheds 500 points ahead of budget

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From Zeeshan Mirza

KARACHI: Pakistan Stock Exchange received a battering on Friday ahead of the presentation of federal budget for FY21. The benchmark KSE-100 index snapped its five-day winning streak as the market faced panic selling and lost a significant 517 points to below 35,000-point mark.
Slump in global crude oil prices and sell-off in world equities weighed on investors’ sentiment. Furthermore, concern over the budget announcement later in the day pushed investors to offload their stockholdings across the board. At the beginning of trading, the market dived and the index sank to intra-day low of over 600 points with investors fearing further downslide.
At close, the benchmark KSE-100 index recorded a decrease of 517.35 points, or 1.47%, to settle at 34,611.23.
Arif Habib Limited, in its report, stated that the market shed 625 points during the day on the back of a global rout in capital and commodity markets. “US and regional markets saw stock indices tumble 4% to 7% and a similar decline was noted in international crude oil prices, which dampened investors’ sentiment in the pre-budget market session,” the report said.
Chemical and textile sector stocks, however, attracted investor interest, though there was no aggressiveness.
The cement sector led the volumes with trading in 30.9 million shares, followed by textile firms (18.5 million) and technology companies (17.9 million). JS Global analyst Danish Ladhani said the KSE-100 index closed on a bearish note, shedding 517 points, or 1.5%, to close at 34,611. “The market remained negative ahead of the federal budget announcement,” he added.
Stocks of exploration and production and financial sectors were the major laggards. Engro (-1%), Fauji Fertiliser (+0.3%), HBL (-2.8%), OGDC (-3%), Hubco (-1.9%), MCB (-2.9%), Lucky Cement (-0.9%), Pakistan Petroleum (-3.2%) and UBL (-2.5%) were the index movers. “Going forward, we expect the market to remain volatile and recommend investors to sell on strength,” the analyst said. Overall, trading volumes decreased to 177.9 million shares compared with Thursday’s tally of 270.6 million. The value of shares traded during the day was Rs6.31 billion.
Shares of 336 companies were traded. At the end of the day, 77 stocks closed higher, 235 declined and 24 remained unchanged. Azgard Nine was the volume leader with 12.7 million shares, gaining Rs1.03 to close at Rs15.55. It was followed by Maple Leaf Cement with 11.4 million shares, losing Rs0.21 to close at Rs26.42 and Unity Foods with 10.8 million shares, losing Rs0.32 to close at Rs12.67.
Foreign institutional investors were net sellers of Rs131.4 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.