Stocks sag on renewed virus scares

Stocks slumped on Monday as scares of stringent restrictions in the wake of big Covid comeback set off a selloff across the board, dealers said.

The KSE-100 Share Index lost 1,089 points or 2.39 percent to settle at 44,431. Trade volume shrank 1.24 percent to 522.5 million shares, while value reduced 6.87 percent to Rs23.47 percent over the last trading session.

Topline Securities in a note said rising Covid-19 cases and a higher Weekly SPI (Sensitive Price Index) resulted in low market depth. As a result investors adopted a cautious approach amid rumors of mutual fund redemptions, which added to the selling pressure at the bourse, the brokerage said.

Of 408 active scrips, 37 advanced, 359 declined, and 12 ended neutral. Maaz Mulla at JS Global Capital said the pressure in the market was partially due to the increasing Covid cases in the country.

“Positivity rates are already in the double digits and well beyond those seen in the second wave, while absolute number of infections also dwarfed the second-wave levels,” Mulla said. KSE-30 shares index shed 2.45 percent or 457.77 points to close at 18,264.31 points.

Arsalan Soomro at KASB Securities said stocks bled profusely due to rising number of Covid cases coupled with sharp rise in the infection rate, which propelled Punjab government to impose lockdown is several cities.

“However, industrial activities would not be suspended. Sentiment has dampened over similar expected measures in Sindh”. Special Assistant to PM, Nadeem Babar's being asked to resign by the PM also dismayed refinery investors, Soomro said.

Selling pressure was witnessed in refinery where Attock Refinery declined 6.9 percent, National Refinery (NRL) 6.9 percent, Pakistan Refinery 7.3 percent, and Byco fell 7.9 percent. Investor sentiment was most probably steamrolled by mutual funds redemption in the latter half of the session.

Technology took a lot of battering as Netsol lost 7.5 percent, TRG Pakistan 7.3 percent, and AVN Technologies shed 7.2 percent to close at their respective lower locks. Investors also punished cement sector as Pioneer Cement was down 5.8 percent, Cherat Cement 5.3 percent, Maple Leaf Cement 3.7 percent, DG Khan Cement 3.8 percent, and Lucky Cement closed 2.3 percent negative.

Ahsan Mehanti at Arif Habib Corp said stocks fell sharply lower amid pressure in scrips across the board as investors weighed likely government measures to ensure Rs700 billion additional revenue, increase in industrial tariff, and withdrawal of corporate tax exemptions.

Slump in global crude oil prices, concerns over withdrawal of Rs140 billion tax exemptions dragged the PSX down, Mehanti said. Meanwhile, currency has strengthened continuously against dollar as lockdown restrictions cut dollar demand with a slowdown in economic activities.

The market is seen bearish in the coming days because of uncertainty over coronavirus pandemic status and analysts have advised caution. Island Textile, strengthening Rs150 to close at Rs2,150/share, and Wyeth Pakistan, rising Rs48.51 to close at Rs984.20/share, were the best gainers of the day. Rafhan Maize, giving up Rs349.99 to close at Rs9,400.01/share, and Nestle Pakistan, shedding Rs92.50 to end at Rs5,847/share ended the day with highest losses.

Byco Petroleum with a turnover of 80.24 million shares led the volumes chart, followed by Pakistan Refinery with 48.96 million, and Azard Nine whose 45.63 million shares changed hands on Monday.