Stocks muted as political noise persists; eyes on monetary move

Stocks on Thursday moved both ways in a tight range to end muted on political jitters with the exception of cement shares that came in the limelight on hopes the government might release funds for expeditious completion of different development projects across the country, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.17 percent or 72.07 points to close at 43,065.09 points level. KSE-30 shares index followed suit with a high of 0.17 percent or 33.69 points to end at 19,965.30 points level.

Analyst Ahsan Mehanti from Arif Habib Corporations said “Stocks closed higher led by cement and banking scrips on investor speculations ahead of major earning announcements due next week and textile scrips on strong valuations”.

“Trade remained higher as investors weighed Fitch affirmations on stable outlook.”

Higher global equities and surging remittances data for December 2019 and recovery in global crude oil prices kept the stock afloat, Mehanti added.

Of 354 active scrips, 200 gained, 137 lost, and 17 ended without a change. The volumes improved to 229.862 million shares, against 171.256 million in the previous session.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “The market is facing resistance around 43,000 points level and with several heavy leverages made, investors are selling making adjustments on portfolios”.

“Fundamentally nothing is wrong with the market; however disturbance on the political horizon was making investors jittery.”

“The market men are anxiously waiting for the monetary policy announcement. Logically there is no room for any rate cut, but market is abuzz that the central bank might opt for some token cut,” Ahmad added. The stock market witnessed some selected buying in cement, engineering, fertiliser, banks, and oil and exploration sectors on hope that buying would surface from international institutions because the share values were cheaper compared to bull-run of 2017, a dealer said.

A leading analyst said the benchmark index was hovering around 43,000 points level as consolidation was in play, while sentiments were also strong as most of the negatives had already been absorbed by the market.

Similarly, expectations of a recovery in economy and political stability will remain in limelight in 2020, he added.

“We expect status quo in upcoming monetary policy, which is also reflected in Wednesday’s T-bill auction where rates remained unchanged in six- and 12- months T-Bill with only two basis points change in 3-months T-bill to 13.47 percent,” he said.

Arif Habib Limited in their analysis said, “The market has been range-bound, for the past two sessions, where the index has been moving in both directions. Political uncertainty has so far kept the otherwise bright outlook muddled”.

Cement and Textile sector scrips performed well with price gains despite news reports that claimed the textile sector was likely to be burdened with additional cost, the brokerage house added.

Top gainers were Shezan International, up Rs23.95 close at Rs555/share, and Murree Brewery, up Rs16.13 to finish at Rs684/share.

Colgate Palmolive, down Rs125 to close at Rs2375/share, and Indus Dyeing, down Rs29.30 to close at Rs557.05/share were the major losers of the day.

Bank of Punjab led the volumes with 60.410 million shares, gaining Rs0.63 to end at Rs14.13/share.

Dewan Cement was on the lowest rung in terms of turnover with 5.136 million shares; however it gained Rs0.31 to end at Rs9.78/share.