Market Daily: KSE 100 falls 605 points falling below 40k mark

LAHORE: In the aftermath of central bank increasing its policy rate ahead of a tense national vote to 7.5 per cent from 6.5 per cent over the weekend, Monday started on a buoyant note largely on the back of gains in Financials.

However, hope turned to despair as the Pakistani rupee dropped sharply in early trade in what appeared to be another round of devaluation by the central bank (fourth intervention since December). The USD-PKR pair was trading at around 128/128.5 per dollar at 4:00 pm local time.

The central bank last devalued the rupee by about 4 per cent in June, after weakening the currency by about 10 per cent during interventions in March and December. The day ended with the 100 Index closing down 605.23 points (-1.5 per cent) at 39,665.77.

The 100 Index volume expanded on d/d basis (+6.9 per cent) amid renewed fear of index losses. Traded value was however flattish (-2.60 per cent) on d/d basis as local institutions opted to stick to sidelines.

Once again, activity in Financials (58.8 per cent of total turnover) dominated the trading activity in today’s session amid heavy activity in MEBL (36.4 per cent of total turnover), HBL (7.5 per cent of total turnover) and UBL (5 per cent of total turnover). Materials (18.1 per cent of total turnover) and Energy (8.4 per cent of total turnover) were two steps behind with contribution to trading activity coming from DGKC (4 per cent of total turnover), PSO (3.4 per cent of total turnover) and OGDC (2.2 per cent of total turnover). Major drag to market performance came from Consumer Staples (-3.51 per cent), Health Care (-2.59 per cent) and Materials (-2.54 per cent) amid losses in PAKT (-5 per cent), SEARL (-3.18 per cent), LUCK (-4.15 per cent), ENGRO (-2 per cent), FFC (-1.55 per cent), DGKC (-4.89 per cent), ISL (-4.93 per cent), FCCL (-4.85 per cent), DAWH (-1.88 per cent) and MLCF (-4.95 per cent).

In related news, DRAP has issued recall alert for critical heart medicine due to impurity found in raw materials of “Valsartan” that is manufactured by M/S Zhejiang Huahai Pharmaceutical Co. Ltd, China. On the political front, Nawaz Sharif, his daughter Maryam Nawaz, and son-in-law Mohammad Safdar challenged their convictions by an accountability court in the Avenfield corruption reference in the Islamabad High Court.

Market participation for the 100 Index increased to 93.22mn shares from 86.96mn in the previous session (+6.9 per cent on d/d basis). Major contribution to total market volume came from BOP (-1.48), FCCL (-4.85 per cent) and BIPL (+2.66 per cent) churning 44.72mn shares out of the All Share volume of 147.48mn shares. Daily traded value for the 100 Index remained flattish at USD 39.45mn from USD 40.51mn in the previous session (-2.6 per cent on d/d basis); HBL (USD 4.67mn), UBL (USD 3.11mn) and DGKC (USD 2.50mn) were among top contributors from traded value perspective. Major contribution to the 100 Index downside came from HBL (-2.32 per cent), LUCK (-4.15 per cent), PSO (-4.59 per cent), ENGRO (-2 per cent) and OGDC (-1.76 per cent) taking away 223 points. On the flip side, UBL (+2.89 per cent) and COLG (+4.77 per cent) added 60 points. The 100 index is 5 per cent above its 52-week low of 37,736.73 reached on December 12, 2017 and 16 per cent below its 52-week high of 47,241.17 reached on August 4, 2017.

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