Stocks extend losses as investors play safe

Stocks gave up more gains on Wednesday with energy and financials becoming investors’ whipping boys as the pandemic shows no letup, dealers said.

Pakistan Stock Exchange’s (PSX) KSE-100 Shares Index lost 0.52 percent or 233.75 points to close at 45,059.12 points, while trade volumes receded to 305.7 million shares from 366.8 million on Tuesday.

Topline Securities in a note said earlier the kick off was on a positive note where the market made an intraday high of 296 points.

However, the bourse didn’t sustain the positivity and lost 272 points in te second half after ECC (Economic Coordination Committee) of the cabinet deferred the summary till next meeting on 40 percent payments to IPPs (Independent power producers), it said.

Major decliners were financials and energy sector as HBL, MCB, OGDC, and PPL cumulatively dented the index by 121 points, the brokerage added.

KSE-30 shares index shed 0.62 percent or 115.86 points to close at 18,464.43 points.

Ahsan Mehanti at Arif Habib Corp said stocks closed lower amid pressure in scrips across the board on concerns over economic uncertainty.

Energy sector outperformed on strong financial results and government buyout plans to ease circular debt, he said.

However, Mehanti added that concerns over surging circular debt and falling rupee weighed on trade.

Of 394 active scrips 156 advanced, 225 declined, and 13 closed as they had opened.

Arif Habib Limited in a report said the market traded range-bound, while selling pressure was concentrated in banks, exploration and production, cement, and steel sector stocks, similar to what was witnessed a day earlier. The absence of active buyers exacerbated the situation leading to index closing lower, the brokerage added.

Service Global Footwear (SGF) hit upper circuit on the first day of listing on PSX, but selling pressure brought the price down, the report said.

Muhammad Mubashar at JS Global said the benchmark index opened on a positive note, touching an intraday high of 45,589 points.

However, profit-taking kicked in and the index slid down, he added.

“Major profit-taking was witnessed in the construction sector where D.G Khan Cement declined 0.5 percent, Lucky Cement 0.7 percent, International Steel 1.9 percent and International Industries lost 2.7 percent,” Mubashir said.

Investor optimism was seen in the refinery sector where National Refinery Limited surged 3.8 percent and Attock Refinery gained 1.0 percent.

On the other hand, Pakistan and the government of Japan signed debt suspension agreements amounting to $367 million under the G-20 Debt Service Suspension Initiative (Phase-I), which was taken positively by the market.

Also, the debt suspension amounting to $1.6 billion under DSSI Phase-I (April–December 2020) with 21 creditor countries is also underway.

“Going forward, we expect the market to remain volatile due to the rollover week, therefore, we suggest ‘sell on strength’ strategy in the ongoing week,” a report issued by Pearl Securities noted.

On top of the list of best gainers were Rafhan Maize, up Rs76 to close at Rs9,975/share, and Colgate Palmolive up Rs159.99 to close at Rs2,750/share.

Pakistan Tobacco, down Rs69.99 to close at Rs1,430/share, and Nestle Pakistan, down Rs75.5 to end at Rs5,765/share, closed the worst day.

Telecard Limited was the volume leader with 29.32 million shares, trailed by Azgard Nine 25.6 million shares, and TRG Pakistan that saw a trade of 18.34 million shares.