Bearish sentiment at bourse, KSE-100 falls over 400 points

A negative session was witnessed at the bourse to mark the start of the week, as the benchmark KSE-100 Index lost over 400 points while volumes declined on account of an uncertain political situation and the continuous delay in the resumption of the International Monetary Fund (IMF) programme, during trading on Monday.

Volumes remained sluggish across the board, with third-tier equities leading the pack. At close, the KSE-100 Index was down 404.12 points or 0.97% to settle at 41,195.07.

Across-the-board selling pressure was witnessed at the bourse, as the index-heavy sectors including automobile, cement, chemical, commercial banks, oil & gas exploration companies and OMCs settled in the red zone.

Market experts attributed the bearish sentiment to the volatile political situation and the government’s inability to resume the IMF’s bailout programme, which remains delayed since November.

“The ongoing political situation and the delay in the IMF programme are driving the negative sentiments at the equity market,” Sana Tawfik, an analyst at Arif Habib Limited (AHL) told Business Recorder.

“Despite the government’s earlier clarification, the market awaits for the development on the IMF front,” she added.

The government on Saturday clarified that media reports stating the delay in signing the IMF agreement is due to the lender seeking assurances from the Ministry of Finance that the funds will not be used for political purposes are “false and unfounded.”

Topline Securities, a brokerage house, in a report, attributed the depreciation of currency and delay in the resumption of the IMF programme as primary reasons behind the bearish trend.

“Pak Rupee trading of over Rs300 vs US Dollar in open and kerb market, continuous uncertainty on IMF program, noise on the political front are the likely reasons of the aforesaid negative sentiments,” said the report.

“Selling pressure also witnessed in the E&P sector which can be attributed to decline in international oil prices,” it added.

On the economic front, rupee sustained losses against the US dollar for the fourth consecutive session, depreciating Re0.74 or 0.26% in the inter-bank market on Monday to close at 286.56.

Sectors driving the benchmark KSE 100 index south included banking (105.36 points), oil and gas exploration (59.89 points) and technology and communication (43.77 points).

Volume on the all-share index declined to 97.7 million from 120.4 million on Friday, while the value of shares traded decreased to Rs2.8 billion from Rs3.3 billion recorded in the previous session.

WorldCall Telecom was the volume leader with 11.45 million shares followed by K-Electric Limited with 9.58 million shares and Air Link Communication with 5.19 million shares.

Shares of 314 companies were traded on Monday, of which 74 registered an increase, 215 recorded a fall and 25 remained unchanged.