Stocks fall as inflation data worsens

The stock market moved slightly lower on Thursday following reports of record high inflation of 38 percent in May, while an uncertainty prevailing on the IMF bailout programme continued to worry investors, traders said.The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index closed lower by 63.79 points or 0.15 percent to 41,266.77 points against 41,330.56 points recorded in the last session. The highest index of the day remained at 41,481.54 points while the lowest level of the day was recorded at 41,226.95 points.

“Stocks closed lower amid reports of govt considering ending the current IMF programme prematurely for new deal and dismal data on CPI inflation at 38pc YoY [year-on-year] in May’23,” Ahsan Mehanti, an analyst at Arif Habib Corp said.

He stated that investor concerns about the outcome of IMF statements regarding Pakistan's political situation and a slump in global crude oil prices had played a catalyst role in the bearish close.KSE-30 index also decreased by 21.84 points or 0.15 percent to 14,658.23 points compared with 14,680.07 points recorded in the last session.

Traded shares dropped by 59 million shares to 99.950 million shares from 158.102 million shares. The trading value decreased to Rs2.867 billion from Rs6.167 billion. Market capital narrowed to Rs6.258 trillion from Rs6.277 trillion. Out of 303 companies active in the session, 134 closed in green, 134 in red and 35 remained unchanged.Ali Najib, an analyst at Topline Securities, said equities had a range-bound session where the benchmark index moved in the narrow band of 254 points (+151 and -104 points). Investors opted to remain sidelined in the absence of any positive trigger and continued uncertainty over the IMF programme where different media sources claimed that the prevailing programme had been called off by the government and a formal request for a new and bigger programme would likely get made post Budget FY24 to the lender of last resort, according to Najib.

During the trading hours, NESTLE, UBL & ENGRO witnessed some profit-taking as they lost 57 points collectively. The highest increase was recorded in Khyber Textile shares, which rose by Rs41.50 to Rs630 per share, followed by Gatron Ind., which increased by Rs30.55 to Rs437.85 per share. A significant decline was noted in Nestle Pakistan, which fell by Rs350 to Rs6,540 per share, followed by Murree Brewery, which decreased by Rs18.90 to Rs280.10 per share.

Brokerage Arif Habib Ltd said the KSE-100 had opened in the green but swung both ways throughout the trading session and eventually closed in the red. “Investor’s participation remained sluggish in the wake of uncertain speculations regarding the resumption of the IMF programme,” it reported. Sectors contributing to the performance included commercial banks (-49.0 points), food and personal care (-25.0 points), fertilisers (-13.9 points), textiles (-6.3 points), and tobacco (-5.6 points).

Globe Residency remained the volume leader with 10.809 million shares which closed higher by one paisa to Rs10.02 per share. It was followed by WorldCall Telecom with 9.751 million shares, which closed flat at Rs1.18 per share. Other significant turnover stocks included Cnergyico PK, Gul Ahmed, Pak Refinery, Pak Elektron, Maple Leaf, Nishat Power, Agritech Limited and D.G.K. Cement. Shares’ turnover in the future contracts decreased to 33.616 million shares from 43.800 million shares.