Daily Times

Pakistan stock exchange benchmark kSe-100 index edged lower on the first trading session of Ramadan, on Monday following another day of sell-off as investors’ sentiments continue to suffer due to mixed earnings of companies and rise in COVID-19 cases, disrupting the domestic economy.

KSE-100 Index dropped over 600 points intraday amid lack of positive triggers, as rise in covid-19 cases continues to rattle economy and lack of economic triggers become detrimental to investors’ sentiments. However, the heavy selling pressure was mounted due to two key economic factors. The plunge in global oil prices stopped investors from accumulating stocks in oil sector which led the market to nosedive in the early hours of trading, however, it later recouped some of the losses.

US oil prices fell heavily on Monday after world’s largest oil-backed exchange traded fund said it would sell all its short-term contracts by the end of the month following pressure from regulators, nearly 20 per cent of its $3.6bn portfolio over a four-day period. U.S benchmark West Texas Intermediate oil price tumbled 27.7 per cent to $12.25/ barrel.

Meanwhile, the cement sector also attracted heavy selling pressure and remained battered on Monday, mainly due to concerns over the recent increase in its per-bag price.

The KSE-100 Index lost 675.30 points in early trade to record its intraday low at 32,131.08. Failing to attract investors, it closed lower by 491.81 points at 32,314.57.Among other indices, the KMI-30 Index plunged 1,055.94 points to end at 51,328.73, while the KSE All Share Index dropped 266.00 points, settling at 22,853.30. Of the total traded shares, 88 advanced and 173 declined.

The overall market volumes were recorded at 122.28 million, of which 77pc came from the 100 index scrips. The volume chart was led by Maple Leaf Cement Factory Limited, followed by Hascol Petroleum Limited and DG Khan Cement Company Limited, exchanging 17.35 million, 7.41 million and 7.01 million shares, respectively.

Sector-wise, the pulled down the index included Oil & Gas Exploration Companies with 89 points, Cement with 85 points, Commercial Banks with 84 points, Power Generation & Distribution with 59 points and Oil & Gas Marketing Companies with 38 points. Among the companies, the most points taken off the index was by Hub Power Company Limited which stripped the index of 50 points followed by Mari Petroleum Company Limited with 44 points, Lucky Cement Limited with 38 points, United Bank Limited with 34 points and ENGRO with 31 points.

Global Markets

Global stock markets rallied over fresh announcements of easing lockdown by more countries, hoping the business activity to revive. Asian markets advanced after Bank of Japan expanded stimulus to cushion the impact of the coronavirus, though the oil price took another tumble with storage running out. The Bank of Japan matched market speculation by pledging to buy unlimited amounts of government bonds and sharply raising purchases of corporate and commercial debt, the latest in a raft of vast central bank stimulus announcements that have helped propel a near 25% rally in global stock markets. Japanese stocks led gains among the region’s major markets, the Nikkei 225 rose 2.71% to close at 19,783.22 as shares of robot maker Fanuc soared 11.95% following the release of the firm’s financial results for the year ended March 2020. Mainland Chinese stocks were up on the day, with the Shanghai composite rising 0.25% to about 2,815.49. Hong Kong’s Hang Seng index also jumped about 1.88%, as of its final hour of trading.In South Korea, the Kospi added 1.79% to close at 1,922.77.

In Europe, major benchmark indexes surged, with England’s FTSE-100, Germany’s DAX and CAC-40 in France all edged higher. Corporate earnings remain high on the trading agenda in Europe. Major Stocks rallied on the earnings announcement with Deutsche Bank shares surged 12.7% after the German lender said it expects to report net income of 66 million euros ($71.56 million) for the first quarter of 2020, compared with 201 million euros in the first quarter of 2019.While, Adidas  predicted that sales will fall by 40% in the second quarter, as the impact of the coronavirus takes hold. The German sportswear giant reported a 19% decline in net sales for the first quarter from the year before. Adidas shares were marginally higher.

Meanwhile, In France, Air France-KLM will receive up to $12 billion in financial aid from the French and Dutch government as the coronavirus pandemic pushes many airlines closer to bankruptcy. The Dutch government said that it would provide between 2 billion euros and 4 billion euros in state aid to KLM, while the French cabinet announced a support package of 7 billion euros for Air France. The deal comes at a time when the airline industry is facing an unprecedented challenge, with international travel brought to a near standstill as a result of a global health crisis. The International Air Transport Association (IATA) said last week that the potential revenue loss by European airlines this year could be as high as $89 billion.