Stocks fall as economy faces more hoops of fire

Stocks on Tuesday fell prey to profit-booking as a gaping current account deficit topped off concerns the economy was still to jump through many more hoops of fire before reaching stability, traders said.

KSE-100 Shares Index, the main indicator of country’s capital market’s health, shed 162.88 to close at 44177.07 points at Pakistan Stock Exchange (PSX).

Arif Habib Limited, in its post-trading commentary, said the market remained choppy as current account deficit number increased to $1.9 billion in November 2021.

On a year-on-year basis, the primary reason behind the deficit was 57 percent increase in total imports to $7.3 billion, the brokerage said.

According the report, profit-taking struck in the first hour of trading following which bulls fought bears the whole day, but lost in the end.

Volumes ended on a dull note whereas activity continued to remain sideways as the market witnessed hefty volumes in the 3rd tier stocks, it added.

During the trading, the market turnover decreased to 223 million shares from 238 million shares, whereas trading value also declined to Rs.8.684 billion from Rs9.395 billion a day earlier.

Pearl Research in a note said the market observed a profit-taking session as global markets turned red on Monday amid concerns over rapid spread of Omicron virus globally.

Selling pressure was seen in the late hours dragging the index to close in red, the brokerage said.

Cumulatively, the Pearl Research report said, banking, energy, and fertilisers eroded 152 points from the index.

Ahsan Mehanti at Arif Habib Corp, said stocks closed lower in the overbought market on concerns over SBP (State Bank of Pakistan) monetary tightening and current account deficit surging to 5.3 percent of GDP.

Worried over minibudget seen bringing in new taxes, uncertainty regarding resumption of IMF (International Monetary Fund) program, and slump in global crude oil prices resulted in bearish close, Mehanti said.

Market capital remained almost flat at Rs7.562 trillion compared to Rs7.580 trillion previously.

JS Research in a note said the index made an intraday high of 44,594 points but could not sustain the momentum owing to profit-taking across the board and closed in the red zone.

Cnergy volumes shot up after it announced it was planning to acquire Puma Energy Pakistan, the JS Research said.

Out of 346 companies active in the session, 145 posted gains, 171 losses, while 30 remained unchanged.

Al-Habib Capital Markets in its market wrap said initially the index opened on positive note but succumbed to selling pressure.

It was owing to negative sentiments arising from concerns over a widening trade deficit of the country, the brokerage added.

Colgate Palmolive posted the highest increase in its share value of Rs64.25 to close at Rs2,525, followed by Sanofi-Aventis, up Rs42.48 to close at Rs610.83 at the end of the trading.

Nestle Pakistan, being the worst loser, shed Rs61.00 to close at Rs.5389, followed by Marri Petroleum, down Rs14.88 to close at Rs.1678.52.

Worldcall Telecom was the volume leader with 21.714 million shares, followed by TRG Pakistan Ltd, registering 20.928 million shares.

The other companies, which saw significant turnover included Cnergyico Pk, Fauji Foods, Telecard Limited, Unity Foods, Hum Network, Ghani Global Holding, Treet Corporation, and Fatima Fertilizer.