With no positive news in the market for the second-consecutive day, the KSE-100 index plunged 63 points to close at 11,912 points on Tuesday, October 18.
Engro closed on the lower cap for the second successive day after authorities announced that gas to the production plant will be closed until further notice. A lower lock in this scrip was adjudged as the main reason for the negative investor sentiment in the market by Mr. Ali Nadeem, who is Manager of Equity Sales at First National Equities.
The ban on export of petroleum products to Afghanistan continued to irk the petroleum sector and a selling pressure was observed in OGDC, PPL and POL. With a selling spree in almost all major securities, the index was bound to fall.
No major activity was observed in the banking sector, which has remained under pressure since the State Bank of Pakistan announced a 150 basis points cut in the discount rate last week. With margins reduced, investors are wary of directing their funds to this sector.
PTCL announced its quarterly result, which was in-line with the market expectations and thus did not trigger a rally in the scrip. Explaining this scenario, Ali said that the market had expected earnings of around Rs. 0.26 and the actual result was Rs. 0.27, which is not a significant difference.
POL was expected to announce its results in the second half today and Ali believes that a favourable result might instigate a rally in the market tomorrow. The petroleum sector has been under pressure for the past few days and Ali stressed that a rally in POL might attract investors to this sector as well.
FFC, Fatima Fertiliser and Attock Refinery continued to experience an upsurge in their prices, largely against the market sentiment. FFC and Fatima Fertiliser continued to build on the raise of urea prices while ATRL sustained an upsurge on the unexpectedly promising quarterly results.
Next week, Lucky Cement and DG Cement are expected to announce their quarterly results and an activity in the cement sector in anticipation of these results will not be a surprise. The government initiated the construction of Diamer Bhasha Dam on October 18, but Ali was unsure if this would have an immediate effect on the cement sector.