The stock market endured a bearish session on the last trading day of rollover week on Friday as the benchmark index dipped in the wake of increasing selling pressure.

In a surprise move, the MSCI proposed to downgrade Pakistan Stock Exchange (PSX) to its Frontier Markets Index in November 2021 from the Emerging Markets Index, which dented investors’ interest.

Adding fuel to the bearish session was the uncertainty about the Financial Action Task Force (FATF) verdict and negotiations between oil transporters and the government following a two-day countrywide strike.

Later, talks between the two sides proved successful as the government and other stakeholders accepted demands of petroleum oil transporters following which they called off the strike.

In the final hour of market trading, the FATF plenary session concluded with the decision to keep Pakistan in the grey list until it complied with all conditions in the action plan.

Moreover, news of talks between Pakistan and the International Monetary Fund (IMF) remaining inconclusive also kept investors on edge.

Remarks of Finance Minister Shaukat Tarin during the concluding session of budget debate in the lower house of parliament helped the stock market breathe during the session. The minister termed the Finance Bill 2021 the “budget of hope” for the underprivileged.

At close, the benchmark KSE-100 index recorded a decrease of 359.18 points, or 0.75%, to settle at 47,603.36.

Speaking to The Express Tribune, Alpha Beta Core CEO Khurram Schehzad said that FATF’s decision was in line with market expectations as Pakistan’s entry into the white list was a bit difficult.

He stated, “Market performance was mostly impacted by news regarding the IMF coupled with the pressure of rollover week.” He expected the market to recover next week.

Arif Habib Limited, in its report, stated that the rollover week ended with the market shedding 359 points during the session.

“Intimation from the MSCI regarding possible downgrade of Pakistan from the MSCI Emerging Markets Index to the MSCI Frontier Markets Index left investors perplexed about the upgrade of stocks in the recent MSCI review, particularly Lucky Cement and TRG Pakistan, which were added to the Standard and Small Index respectively,” it said.

In addition, the finance minister’s final budget speech had a positive surprise for auto stocks.

Selling pressure was observed across the board, which was mainly concentrated in bank, exploration and production and cement stocks.

Sectors contributing to the performance included banks (-114 points), cement (-101 points), exploration and production (-63 points), pharmaceutical (-40 points) and investment banks (-28 points).

Individually, stocks that contributed positively to the index included Pakistan Services Limited (+29 points), FrieslandCampina Pakistan (+14 points), Systems Limited (+12 points), Azgard Nine (+7 points) and Hubco (+7 points).

Stocks that contributed negatively were Lucky Cement (-66 points), HBL (-50 points), UBL (-36 points), Pakistan Petroleum (-20 points) and Dawood Hercules (-19 points).

Overall trading volumes surged to 761.4 million shares compared with Thursday’s tally of 638.8 million. The value of shares traded during the day was Rs21.7 billion.

Shares of 402 companies were traded. At the end of the day, 155 stocks closed higher, 229 declined and 18 remained unchanged.

WorldCall Telecom was the volume leader with 142.2 million shares, gaining Rs0.3 to close at Rs3.95. It was followed by Byco Petroleum with 53.8 million shares, losing Rs0.35 to close at Rs12.15 and Pace (Pakistan) with 45.2 million shares, gaining Rs0.11 to close at Rs6.96.

Foreign institutional investors were net sellers of Rs935.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.