Stocks fall 2.15 percent on abysmal earnings

Stocks slipped over two percent on Monday to a 10-month low, weighed down by an uncertain political climate in the country, while corporate earnings failed to meet investors’ expectations, dealers said.

Analyst Ahsan Mehanti at Arif Habib corp said stocks closed lower amid concerns over political uncertainty and weak financial results. “Economic uncertainty, falling foreign exchange reserves and dismal trade data for July 2017 played a catalytic role in bearish close,” Mehanti said. “Foreign inflows (however) and surge in global crude prices amid falling US inventories supported the index to close above days low.”  

The KSE 100-share Index of Pakistan Stock Exchange shed 2.15 percent or 925 points to close at 42,153.38 points.KSE 30-share Index fell 1.92 percent or 426.09 points to end at 21,772.56 points.

As many as 384 shares were active; of which 40 increased, 334 decreased and 10 remained unchanged. The ready market volume stood at 153.157 million shares as compared to 188.136 million shares a day earlier.

Elixir Securities, in a report, said equities tumbled yet again with the benchmark KSE-100 Index falling to a ten-month low and settling over 42,100 level.

“Market traded sideways in early trade as investors waited with a bated breath for flows from institutions to set the market direction,” the brokerage added. “Cements later led declines as the news of cut in cement prices not only affected the sector negatively but also dented the market sentiments.”

Institutional selling in major sectors exacerbated the drop in KSE-100 Index.  Among laggards, Lucky Cement (down 5 percent) dented the Index the most, followed by Sui Northern Gas Pipelines (dropping 5 percent), Pakistan State Oil (decreasing 4.4 percent), DG Khan Cement (dipping 5 percent) and Dawood Herculues (declining 5 percent).

Among gainers, United Bank was up 1.5 percent, Pakistan Petroleum rose 1.7 percent and Pakistan Oilfields increased 2.2 percent due to rising oil prices in the international market. They helped the Index to make some gains.

Analysts expect a recovery in the coming days as oversold index names looked ripe for cherry-picking. Companies, reflecting highest gains, included Rafhan Maize up Rs125 to
close at Rs6,800/share and Phillip Morris Pakistan that rose Rs49 to end at Rs2,550/share. Companies, with most losses, included Unilever Foods down Rs310 to end at Rs5,890/share and Wyeth Pakistan that fell Rs113.45 to close at Rs2,155.55/share.

Highest volumes were witnessed in Azgard Nine with a turnover of 15.12 million shares. Its stock price shed 22 paisas to close at Rs16.04/share. Bank of Punjab was the second with a turnover of 11.41 million shares. It shed 59 paisas to end at Rs9.73/share. TRG Pakistan was the third with a turnover of 8.75 million shares. It shed Rs2.11 to finish at Rs40.77/share.