Stocks slip as investors cash out ahead of monetary meet

Stocks hit a rout Monday as investors cashed out of their positions, playing safe, ahead of the central bank's monetary meting this week amid concerns over IMF loan programme holdup, traders said.

Pakistan Stock Exchange's (PSX) benchmark KSE-100 Shares Index dropped 282.16 points or 0.68 percent to 41,348.19 points after testing a high of 41,685.81 and a low of 41,319.11 points in the day trade.

JS Research said going forward, investor sentiment would be driven by positive news from the IMF front. “We recommend investors to adopt a buy-on-dip strategy in the Banking and E&P sectors,” the brokerage said.

Arif Habib Corp’s Ahsan Mehanti said stocks closed bearish on investor concerns for economic uncertainty. “Pressure remained in scrips across the board as investors weighed tough IMF conditions amid monetary targets, and energy pricing ahead of the release of a $2 billion tranche next month,” he said.

According to Mehanti, speculations ahead of SBP policy announcement this week and dismal data on the current account deficit in May 2022 dragged the index down. KSE-30 index also fell by 124.31 points or 0.78 percent to 15,736.92 points.

Traded shares, however, shrank 68 million to 86.619 million from 154.030 million shares. Trading value decreased to Rs3.048 billion (the lowest since February 20, 2022) from Rs4.031 billion. Turnover in the futures’ contracts increased to 46.626 million shares from 42.455 million in the last session.

Market capital narrowed to Rs6.947 trillion from Rs6.962 trillion. Out of 303 companies active in the session, 88 closed in the green, 197 in the red, while 18 remained unchanged.

Topline Securities said after opening sideways the market skidded making an intraday low of 307 points amid low volumes as investors are waiting for the IMF to green-signal the resumption of the suspended loan programme.

FFC, LUCK, UBL, BAHL, and ENGRO were the major decliners in the trading session cumulatively dented the Index by 124 points.

The highest increase was recorded in share prices of Sanofi-Aventis as it jumped by Rs86.13 to Rs1,234.61/share, followed by Sapphire Textile, up Rs76.40 to end at Rs1,178.90/share.

It was a bitter day for JDW Sugar as it posted highest losses of the day, shedding Rs15 to close at Rs215/share, closely followed by Indus Motor Co that lost Rs14.97 to close at Rs1,140.11/share.

A post-session report by Arif Habib Ltd said the market stayed under pressure throughout the day due to concerns over mounting inflation and expected rate hike in the upcoming monetary policy.

“The benchmark index opened in the green zone but soon succumbed to profit-taking. Volumes remained thin in the mainboard although decent volumes were witnessed in the third tier stocks,” it reported.

Sectors contributing to the negative performance included fertiliser (-72.6 points), cement (-60.8 points), E&P (-33.2 points), automobile assembler (-18.9 points), and pharmaceuticals (-12.9 points).

Sui Northern Gas Pipelines emerged as the highest traded stock with a trade of 12.474 million shares. The gas utility gained 93 paisas to close at Rs36.40/share. It was followed by Agritech Limited with 8.093 million shares. The fertiliser-maker’s share price grew 20 paisas to Rs6.74/share.

Other stocks that recorded significant turnover included Pakistan Refinery, Maple Leaf, WorldCall Telecom, K-Electric Ltd, Ghani Global Holding, Cnergyico PK, DGK Cement, and TPL Properties.