Bearish trend persists

A bearish trend persisted on Pakistan Stock Exchange weighed by selling from local and foreign investors. The benchmark KSE-100 index closed below 47,000 psychological level at 46,874.37 points, down 250.75 points Tuesday. Daily trading volumes slightly improved to 164.450 million shares as compared to 154.156 million shares traded Monday.
The market capitalisation decreased by Rs 40 billion to Rs 9.300 trillion. Out of total 371 active scrips, 230 closed in negative, 126 in positive while the value of 15 stocks remained unchanged. Foreign investors remained net sellers of shares worth $2.7 million. Engro Polymer was the volume leader with 16.998 million shares. However, it lost Rs 0.25 to close at Rs 25.11 followed by K-Electric that gained Rs 0.12 to close at Rs 8.00 with 15.834 million shares. TRG Pak declined by Rs 1.03 to close at Rs 49.44 with 9.154 million shares.
Sanofi-Aventis and Mari Petroleum were the top gainers with Rs 61.00 and Rs 39.87, respectively to close at Rs 1,911.00 and Rs 1,499.40. Nestle Pakistan and Sapphire Fiber were the top losers with Rs 242.50 and Rs 50.35, respectively to close at Rs 9,400.00 and Rs 1,092.50.
Nabeel Haroon at JS Global Capital said that the market continued its bearish trend. Decline in the market was led by the banking sector, as the index heavyweights such as HBL (down 1.81 percent) and MCB (down 1.38 percent) cumulatively contributed around 88 points towards the decline. ISL in the steel sector lost value to close on its lower circuit as the company posted earnings of Rs 4.64/share (lower than street estimates) in its 9MFY17 result announcement. PRL (down 3.61 percent) in the refinery sector lost value to close in the red zone as the refinery declared its results for 3QFY17. In its result, the company posted earnings of Rs 1.21/share for the quarter which was 42 percent lower.
Ahsan Mehanti at Arif Habib Corporation said that the stocks closed lower amid thin trade as investor await Panamagate case decisions likely to ease political noise. The oil stocks supported the index close above session lows after robust financial results of OMCs. He said concerns over dismal exports, current account deficit, foreign outflows and high circular debt played a catalyst role in bearish close.
An analyst at Topline Securities said that the KSE-100 index closed below the 47,000 mark after 112 trading sessions over almost 4 months. Investors' fear and loathing has driven year-to-date return further into negative territory, clocking in at negative 1.95 percent as compared to MSCI EMs return of 11.65 percent.