Stocks extend losses on new taxation scares

Stocks on Friday stacked up losses as the IMF's latest shove for new taxes sent chills down investor spines ahead of monetary policy announcement on Monday, traders said.

The benchmark KSE-100 Shares Index shed 210.85 points or 0.48 percent to close at 43,270.65 points after topping 43,533.12 and bottoming 43,232.74 points.

Darson Securities in a note said equities endured a range-bound session as investors avoided taking fresh positions due to upcoming monetary policy announcement and lack of triggers.

“The market started on a strong note; however, the benchmark index could not sustain the momentum,” the brokerage said.

The KSE-30 index also decreased by 76.97 points or 0.47 percent to 16,398.66 points.

Analyst Ahsan Mehanti at Arif Habib Corp said stocks closed lower amid fears over the adverse impacts of the IMF-led mini-budget for imposing Rs50 billion fresh taxes.

The falling rupee and uncertainty over central bank policy announcement on August 22 amid high inflation sealed a bearish close, Mehanti said.

JS Research said moving forward, the upcoming monetary policy meeting of SBP and the IMF agreement would remain key driving forces for the market.

“We recommend investors to adopt a 'buy on weakness' strategy in technology, E&P, and cement sectors," the JS report said.

Traded shares fell 315 million to 306.208 million from 621.216 million shares. The trading value slumped to Rs6.393 billion from Rs10.496 billion. Market capital lowered to Rs7.201 trillion from Rs7.234 trillion. Turnover in the futures contracts decreased to 63.612 million shares from 120.421 million shares.

Out of 323 companies active in the session, 110 ended higher, 185 lower, and 28 ended unchanged. Topline Securities said investor participation was low as they preferred to remain on the sidelines before the monetary policy announcement on Monday.

A major contribution to the index came from MEBL, BOP, AICL, BAHL and PKGS, as they cumulatively contributed 37 points to the index.

On the flip side UBL, HUBC, HMB, LUCK, and BAFL dented the index by 138 points.

Siemens Pakistan led the gainers by rising Rs45 to Rs750/share, followed by Shield Corp that secured Rs21.14 to close at Rs303.13/share.

Sanofi-Aventis emerged as the worst performing stock of the session by losing Rs61 to finish at Rs1,400/share, followed by Sapphire Textile, which went down by Rs55.50 to Rs1,007/share.

Arif Habib Ltd said the market remained under pressure throughout the day as trade remained dull in the first session due to a lack of triggers.

“In the second session, profit-taking led the index into the red zone,” the brokerage said.

The refinery sector remained in the limelight, it said, while mainboard volumes stayed dull, but hefty volumes were observed in the third-tier stocks.

Sectors contributing to the performance included banks (-81.6 points), cement (-56.4 points), power (-33.3 points), tobacco (-11.2 points), and E&P (-10.3 points).

Hascol Petrol was the highest traded stock of the day with 71.464 million shares. It increased by 55 paisas to Rs6.87/share. The second most traded stock was Pakistan Refinery that posted a turnover of 19.455 million shares. It closed lower by 8 paisas to Rs19.83/share.

Other stocks that recorded significant turnover included Bank of Punjab, Cnergyico PK, WorldCall Telecom, Nishat ChunPow, K-Electric Ltd, Unity Foods Ltd, Pervez Ahmed Co, and National Bank XD.