Market Daily: Political uncertainty, Nawaz Sharif’s remarks wreak havoc at PSX

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LAHORE: The session left a trail of blood on the streets as market bulls were ripped to shreds in the wake of rising political uncertainty fueled by controversial remarks from Nawaz Sharif during an interview regarding the involvement of “non-state actors” in terrorist activities, in particular, Mumbai attacks. An urgent meeting of National Security Committee was called during morning hours to discuss Nawaz Sharif’s remarks on Mumbai attacks after Indian media picked up his statement and labelled it as a confession of state-sponsored terrorism. Later, NSC categorically dismissed Nawaz Sharif’s recent statement on the 2008 Mumbai attacks and unanimously termed it “incorrect and misleading”. The market in the wake of rising uncertainty crashed and closed near its intraday low amid rising participation (vol +13 per cent and val +19.3 per cent on d/d basis) and panic selling. The day ended deep in red with the 100 Index losing 1,095.93 points (-2.51 per cent) to close at 42,498.86.

Cumulative losses since 6th April, 2018 (from intraday high of 47,144.12) are at -9.85 per cent (-4,645.26 points); just a sliver above correction territory. Major drag to index decline came from Health Care (-4.27 per cent), Industrials (-4.17 per cent), Materials (-3.12 per cent), Energy (-2.93 per cent) and Consumer Discretionary (-2.88 per cent) following heavy losses in SEARL (-5 per cent), ABOT (-4.63 per cent), SHFA (-5 per cent), MTL (-4.13 per cent), TRG (-4.96 per cent), PIBTL (-5.11 per cent), PAEL (-5 per cent), ENGRO (-3.97 per cent), LUCK (-3.10 per cent), DAWH (-4.42 per cent), DGKC (-5 per cent), FFC (-1.68 per cent), FCCL (-4.93 per cent), ISL (-4.13 per cent), INIL (-5 per cent), POL (-4.66 per cent), OGDC (-2.23 per cent), PPL (-2.23 per cent), PSO (-3.06 per cent), NML (-4.16 per cent), HCAR (-4.93 per cent) and KTML (-3.67 per cent). Later, in a hurriedly called press conference, PM Abbasi tried to clarify that statement of Nawaz Sharif was ‘misinterpreted’ in the media. However, the presser failed to lift market sentiment as market watchers dubbed it “too little too late”.

Market participation for the 100 Index increased to 97.49mn shares (+13 per cent on d/d basis). A major contribution to total market volume came from KEL (-4.78 per cent), FDIBL (+1.99 per cent) and BOP (-4.01 per cent) churning 29.64mn shares out of the All Share volume of 176.12mn shares. Daily traded value for the 100 Index shot up to USD 51.0mn from USD 42.75mn in the previous session (+19.3 per cent on d/d basis); ENGRO (USD 4.25mn), EFERT (USD 4.05mn) and DGKC (USD 3.88mn) were among top contributors from traded value perspective. Major contribution to the 100 Index downside came from HBL (-3.28 per cent), ENGRO (-3.97 per cent), POL (-4.66 per cent), LUCK (-3.1 per cent) and OGDC (-2.23 per cent) taking away 326 points. On the flip side, HMB (+1.54 per cent), DCR (+1.89 per cent) and ABL (+0.59 per cent) added only 11 points. The 100 index is 13 per cent above its 52-week low of 37,736.73 reached on December 12, 2017 and 20 per cent below its 52-week high of 53,127.24 touched on May 25, 2017.

Technically speaking, the 100 Index extended losses in the session on Monday after closing below 200EMA on Friday. On its way south, market bears took out support at 43,386 and closed at levels last seen in February 2018. The day ended with 2 major negative crossovers of exponential moving averages i.e. 20/50 crossover and 10/200 crossover.