The Pakistan Stock Exchange extended its losses and fell 175 points on Wednesday primarily on the back of further depreciation of the rupee against the US dollar.
The local currency crossed 170 in the open market and closed at 169.12 in the inter-bank market.
In addition to that, the lack of clarity over the new refinery policy dented investor interest in the refinery sector, which ended the day entirely in the red.
A lack of positive news flow kept the overall sentiment pessimistic and caused index-heavy automobile, cement and oil sectors to close mostly with losses.
Following a brief open in the positive, the KSE-100 index began its downward slide and fell steadily until midday. Investors resorted to cherry-picking of stocks after midday and helped wipe off some of the losses.
At close, the benchmark KSE-100 index recorded a decrease of 174.62 points, or 0.37%, to settle at 46,716.72.
A report of Arif Habib Limited stated that the market continued its downtrend following the slide in rupee’s parity with the dollar, which touched 169.70 in inter-bank trading and crossed 170 in open market.
Unabated foreign selling coincided with the offloading of positions by the local mutual funds on the pretext of redemptions, it said.
Cement, exploration and production, oil and gas marketing and refinery sectors bore the brunt of persistent selling pressure. Limited buying interest was observed in technology stocks, which had gone down in the past couple of sessions.
The index lost a total of 386 points and closed down by 175 points, the report said.
JS Global analyst Maaz Mulla said that the KSE-100 index succumbed to the pressure and lost 175 points, ending the day at 46,717.
Among major news for the day, the US dollar closed at 169.12 against the rupee. Moreover, the head of the US delegation to the Financial Action Task Force (FATF) arrived in Pakistan on a three-day visit to discuss Islamabad’s progress on the action plan agreed with the forum.
Refineries continued to be on the downtrend, among which Byco (-1.2%), Pakistan Refinery (-1.3%) and Attock Refinery (-2.4%) closed negative.
A hammering was witnessed in the cement sector where Pioneer Cement (-4.1%), Kohat Cement (-2.4%), Maple Leaf Cement (-4.6%), Cherat Cement (-2.9%) and DG Khan Cement (-3%) lost ground.
“Investors are recommended to stay cautious at current levels,” the analyst said.
Overall trading volumes dropped to 332.8 million shares compared with Tuesday’s tally of 479.8 million. The value of shares traded during the day was Rs11.4 billion.
Shares of 518 companies were traded. At the end of the day, 161 stocks closed higher, 329 declined and 28 remained unchanged.
TPL Corp was the volume leader with 29.6 million shares, gaining Rs1.68 to close at Rs24.67. It was followed by Telecard Limited with 28.3 million shares, losing Rs1.19 to close at Rs23.17 and Byco Petroleum with 23.3 million shares, losing Rs0.11 to close at Rs8.97.
Foreign institutional investors were net sellers of Rs399.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.