KARACHI: Recovery at the stock market proved short-lived as the bulls retreated on Wednesday, leaving the KSE-100 index with loss of 189.42 points (0.46 per cent) at 40,704.80.

The onset of bearish spell was attributable to heavy sell-off by foreign investors ahead of the MSCI rebalancing due on Friday, where Lucky Cement and United Bank have been removed from the Global Standard Index Pakistan and shifted to Small-Cap Index. The changes are to be implemented at the close of business on Nov 30.

Although expected, the foreign selling worth $9.95 million could not be fully absorbed by the local participants. Figures released by the National Clearing Company of Pakistan in the evening showed local individuals and institutions in the buying mood, setting aside other sentiment dampeners such as the ongoing rollover week for future contracts and lack of clearer visibility on the external financial assistance packages.

Investors, however, took heart from the finance minister’s assertion that the government could afford a two-month delay to stalled bailout negotiations with the International Monetary Fund. The upcoming monetary policy also kept nervous investors cautious.

Bourse started the day with positive momentum, gaining 187 points in early trading hours. However, trading remained choppy throughout the later hours of the session with the index making an intraday low by 241 points.

Selling pressure was observed in exploration and production and fertiliser, each taking away 45 points from the index. Lager banks and cement also saw profit-taking.

The volume, already thin, dipped further by 6pc to 124m shares, while traded value edged higher by 1pc to Rs6.56bn.

Major decliners were Habib Bank, down 1.15pc, Pakistan Petroleum 1.15pc, Oil and Gas Development Company 0.86pc, United Bank 0.94pc and Engro Corporation 0.69pc, scrapping 93 points. On the flip side, K-Electric, up 4.61pc, Pakistan State Oil 1.45pc and Colgate-Palmolive Pakistan 4.89pc added 45 points.

Published in Dawn, November 29th, 2018