Stocks fall 1.6 percent, track global weaknesses

KARACHI: Stocks dropped 1.6 percent on Tuesday amid profit-taking and foreign investor sell-off due to continuing economic uncertainty, while the absence of financial institutions and mutual funds from the bourse further eroded share values in auto, cement, and steel sectors, dealers said. Shumaila Badar, head of research at Ismail Iqbal Securities said the bearish sentiment that took over the market late in the session on Monday continued to dominate.

The bearishness is attributable to delay in key decisions to be taken by the government, including electricity tariff hike and loan from the IMF. Investors were also waiting for any good news regarding Saudi Arabia’s possible help for Pakistan’s external position.

National Bank was one of the top contributors to the benchmark index declines, as its announced result missed analysts’ expectations.

“We expect the bearish sentiment to continue in the next session,” she said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 1.64 percent or 630.52 points to close at 37,714.90 points level. KSE-30 shares index followed suit with a decline of 1.59 percent or 291.05 points to end at 18,071.56 points level.

As many as 373 scrips were active in today’s session, of those 82 moved up, 278 retreated, and 13 remained unchanged. The ready market volumes stood at 223.937 billion shares, as compared with the turnover of 235.357 billion shares in the previous session.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stock fell across the board on investors’ concerns for global equity selloff and slump in global crude oil prices.”

Dismal data on external account for July-September 2018, uncertainty over outcome of FATF assessment report, and concerns for risks over Pakistan Stocks exclusion from the MSCI emerging markets index played a catalytic role in the bearish close in the volatile futures rollover week at PSX, he added.

Murtaza Jaffar, analyst from Elixir Securities said the Economic Coordination Committee (ECC) was schedule to meet on Monday. It was to review and finalise modalities pertaining to issuance of NOC to Shangai Electric Power (SEP) for the purchase of 66 percent holding of Karachi Electric Limited and decide on the pending increase in electricity tariffs.

He said all eyes would be on the PM’s visit to Saudi Arabia, and any development on potential flows for Pakistan’s ailing reserves and/or facility for deferred oil payments would lift investor sentiments going forward.

“We however believe that potential flows, if any, are unlikely to be meaningful enough to avoid an IMF program,” he said.

The highest gainers were Pakistan Tobacco, up Rs72.76 to close at Rs2,352.76/share, and Sapphire Textile, up Rs49.90 to finish at Rs1,179.90/share.

Companies that booked highest losses were Rafhan Maize, down Rs345.05 to close at Rs6,555.95/share, and Colgate Palmolive, down Rs129.99 to close at Rs2,470.00/share.

Pakistan Elektron recorded the highest volumes with a turnover of 18.563 million shares. The scrip gained Rs0.29 to close at Rs26.97/share.

The lowest volumes were witnessed in Bank of Punjab, recording a turnover of 22.977 million shares, and losing Rs0.57 to end at Rs10.83/share.