Selling pressure sets in

Pakistan Stock Exchange (PSX) witnessed heavy selling pressure in almost all sectors Monday. The benchmark KSE-100 index declined by 487.25 points to close at 48,520.75 points. The market opened on a positive note and the index hit 49,081.19 points intra-day high, however it failed to sustain this level due to heavy selling pressure and dropped at 48,490.19 points intra-day low.
Trading activity also remained thin as daily trading volumes on the ready counter decreased to 250.993 million shares as compared to 275.386 million shares traded Friday. The market capitalisation decreased by Rs 87 billion to Rs 9.617 trillion. Out of total 407 active scrips, 325 closed in negative and only 65 in positive while the value of 17 stocks remained unchanged.
Aisha Steel Mill was the volume leader with 24.971 million shares, however it declined by Rs 1.25 to close at Rs 23.80 followed by Lotte Chemical that gained Rs 0.47 to close at Rs 10.51 with 18.585 million shares. Bank of Punjab lost Rs 0.64 to close at Rs 14.78 with 15.040 million shares. Pak Tobacco and Khyber Tobacco were the top gainers with Rs 58.84 and Rs 47.25, respectively to close at Rs 1,235.71 and Rs 992.35. Wyeth Pak and Indus Motor Co were the top losers with Rs 198.25 and Rs 82.62, respectively to close at Rs 3,766.88 and Rs 1,596.55.
Arhum Ghous at JS Global Capital said that the market opened on a positive note where the index made an intraday high of 73 points. This positivity was short-lived as heavy selling was witnessed across the board, which led the index to close around 48,521 level, down 487 points. Banking sector closed lower than its previous day close as heavy weights HBL (down 0.16 percent), MCB (down 0.86 percent) and UBL (down 0.99 percent) lost value to close in the red zone. Selling pressure was witnessed in the cement sector as it lost value to close (down 1.4 percent) lower than its previous day close. POWER (down 5.0 percent), DCL (down 5.0 percent), DGKC (down 2.15 percent) and LUCK (down 0.35 percent) were among the major losers in the cement sector. In the cement sector DC, lost value to close in the red zone as the company declared its financial results for the half year of FY17. Profit taking to some extent was witnessed in the steel sector, as sector heavyweights ASL (down 5.0 percent), ISL (down 4.89 percent) and INIL (down 4.90 percent) lost value to close in the red zone. SEARL (down 0.79 percent) in the Pharmaceutical sector lost value to close in the red zone as the company declared its financial results for the first half of FY17.
Ahsan Mehanti at Arif Habib Corporation said that stocks closed sharply lower on pressure in scrips across the board on concerns for outcome of regulatory action over defaulting brokerages. Weak sentiments remained in the trading session on renewed concerns for foreign outflows, surging circular debt in the energy sector and dismal payouts in the earnings season. He said surging trade deficit, reports of falling exports and consolidation post major earning announcements at PSX played a catalyst role in bearish close.
An analyst at Topline Securities said that the KSE-100 index continued its decline as SECP's strict measures on in-house financing sapped liquidity from the market. Moreover, as month end looms, the rush to clear out debit balances further magnified the selling pressure. Sentiment towards the steel sector was dampened as reports surfaced of LHC granting interim relief to steel importers by temporarily suspending collection of anti-dumping duty while case proceeding are herd. This pushed ASL, ISL and INIL down by 5.0 percent.