LAHORE – Pakistan Stock Exchange saw the sharpest decline of 1,219 points in ongoing calendar year (CY’18) on Wednesday as the KSE 100-index lost massive 1,219 points or 2.9 percent to close at 40,346 points.
Major correction appeared in the market due to continuous foreign net outflows over the past week and the upcoming accountability court hearing on corruption cases against former prime minister Nawaz Sharif and his family related to Avenfield reference. The final verdict by the court is expected to be announced on 6th of July.
Volumes remained lackluster as 118 million shares exchanged hands. PAEL (-5 percent) from the electrical goods sector led the market volumes with 10 million shares. OGDC (-4.85 percent), HBL (-3.39 percent), LUCK (-4.54 percent), UBL (-2.86 percent) and ENGRO (-2.50 percent) were among major laggards which dragged the index down by 339 points.
Cement sector remained under the hammer where DGKC (-5 percent), CHCC (-5 percent), MLCF (-5 percent) and FCCL (-5 percent) closed at their respective lower circuit. Other major players such as LUCK (-4.54 percent) and KOHC (-4.81 percent) also closed in the red zone. Selling pressure was witnessed in the banking space where big banks such as HBL (-3.39 percent), UBL (-2.86 percent) and MCB (-1.67 percent) cumulatively contributed 161 points to the declining index. Moreover CPI inflation clocked-in at 5.21 percent YoY for June-2018. Moving forward it is expected that market will exhibit volatility in the coming sessions due to overall political ambiguities in the market.
Experts said that the KSE index experienced the sharpest decline of CY18 in absolute points, with index losing 1,219 points, down by 2.93 percent. Cumulatively, the index has lost 1653 points in the past four trading sessions.
Compounded by lack of any positive triggers, political noise continues to keep market jittery with the verdict on Avenfield case against Nawaz Sharif and Mariam Nawaz to be announced on 6th July. Worst performing sectors included commercial banks, oil & gas exploration companies, and fertilizer, reducing the index by 605 points.
The banking sector remained under pressure due to lower than expected inflation, in our view.
Market participation remained dull with traded volumes of 118m shares and value traded at Rs5.8b. However, the volume has increased 13 percent and value traded has improved by 55 percent as compared to previous day.
Experts said that a huge revenue shortfall due to inability of provincial governments to provide projected budget surplus and revenue impact of the decisions taken by former Prime Minister Shahid Khaqan Abbasi-led administration pushed the deficit to over 6.1 percent in the second week of June 2018.