KARACHI: The stock market performance on Monday was predictable. The KSE-100 index, which started in the positive and rose to intra-day high of 221 points, soon succumbed to selling pressure.
It wiped out the early day gains and sank to intra-day low by 99 points, before finally closing by 64.60 points (0.16 per cent) at 40,504.75.
Investors decided to err on the side of caution by booking available profit and put the plans of taking fresh positions on the hold. Although the ruling PTI managed to secure lead in the Gilgit-Baltistan elections, the opposition was preparing to contest the results.
It fueled the fire lighted by the religious enthusiast who have surrounded the capital Islamabad leading to major disruptions of communication. The opposition was already finalising its arrangements for scheduled rallies in Multan and Lahore.
And above all, the rising cases of Covid-19, which posed a threat of a breakout as the standard operating procedures (SOPs) were being flouted everywhere. A stock strategist said that all of that could scarcely attract investors to the market and that was reflected by the decrease of the traded volume by a quarter from the previous session.
Investors brushed aside the positive news flow of the surge of 2pc in international oil prices, increase in foreign direct investment, higher foreign exchange reserves and remittances in the month of October. The market chatter of cement prices increase by Rs5 per bag from Tuesday did nothing to spike the cement stock prices.
Some investors also thought that with the end of results season, investors may have sought exit from what they believed was overbought market in key stocks.
In the oil & gas marketing companies sector, Shell Pakistan rose 4.1pc after the company’s material information announcement of the board’s approval of increase in authorised capital to Rs3 billion, from Rs1.5bn. Volumes declined further from 243 million shares to 181.4m shares (down 25pc day-on-day).
The major scrips that dragged down the market included Pakistan Petroleum; Oil and Gas Development Company; Lucky Cement, Systems Ltd and Pakistan Oilfields. Shares that contributed positively to the index included United Bank Ltd, K-Electric, Fauji Fertilizer, Fauji Cement and Hub Power Co.
Published in Dawn, November 17th, 2020