Pakistan Equities tumbled yet again on Monday with benchmark KSE 100 index falling to a 10-month low and settling over 42,100 level. The benchmark index shed 925 points to close at 42153.38 level.
Market traded sideways in early trade as investors waited with bated breath for flows from institutions to set the market direction. Cements later led declines as the news of cut in cement prices in North not only impacted the sector negatively but also dented the market sentiments, commented analysts at Elixir Securities.
Having receded over 20% from its high of 52,876 points on 24th May, one can safely say that KSE 100 index has officially entered bear market territory, analyst at Topline Securities observed.
Institutional selling in other major sectors amid no aggressive bids on system also exacerbated the drop in KSE 100 Index.
Among laggards, Lucky Cement dented index most followed by Sui Northern Gas Pipelines, Pakistan State Oil, DG Khan Cement and Dawood Herculues. While among leaders, United Bank, Pakistan Petroleum and Pakistan Oilfileds contributed most positive points to Index.
Top 10 Index point decliners were LUCK (-5%), SNGP (-5%), PSO (-4.1%), DGKC (-5%), DAWH (-5%), FFC (-2.9%), ENGRO (-2.4%), HUBC (-2.2%), SEARL (-5%) and NML (-5%); withholding 402 points.
On the sector front Cement shed 198 points on the back of a Rs25/bag price cut by the 2nd largest producer (LUCK), Fertilizer 130 points, OMC 130 points, Banks 76 points and Power 51 points while E&P added 21 points.
Participation thinned to a crawl as volumes declined 19% to 153 million shares while traded value plunged 31% to Rs7.8bn/$74 million.
Participants have been gripped by fear & uncertainty given the political meltdown, while economic data such as slipping FX reserves, burgeoning CAD, imminent currency risk etc, which are now being scrutinized with electron microscopes focused only on worst possible outcomes. Meanwhile government`s inaction in the form of stuck up industry refunds (textile, fertilizer etc), shelving of privatization due to `political uncertainty`; failing to link OMC margins to CPI etc. are also raising question marks on growth, according to Topline Securities.
Analysts expect a bounce back in the coming days as oversold index names look ripe for cherry-picking.
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