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Thursday March 28, 2024

Stocks shed 2.29 percent on macroeconomic concerns

By Our Correspondent
October 13, 2018

KARACHI: Equities came under heavy selling pressure owing to the US State Department statement that it will review the government's bailout plea to the International Monetary Fund (IMF), which sent negative signals to investors that it might create difficulties on procuring new loans, intensifying economic woes, dealers said.

Shumaila Badar head of research at Ismail Iqbal Securities said, “The

market tanked, as stocks continued to incorporate the macro-economic fears.”

Negative sentiments were exacerbated by fears that Pakistani stocks in the MSCI emerging market index would undergo a decline in weight due to the recent rout that has brought down their market capitalisation.

News of steel and fertiliser price increases could not help sustain the respective sectors.

Earnings season also didn’t help as National and Attock Refineries posted losses for the quarter, and Pakistan Oilfields surprised investors negatively, she said.

“We expect the market to be range-bound in the coming session,” Shumaila added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 2.29 percent or 880.37 points to close at 37,517.93 points level. KSE-30 shares index followed suit with a decline of 2.72 percent or 510.45 points to end at 18,256.91 points level.

As many as 363 scrips were active in today’s session, of those 60 moved up, 288 retreated, and 15 remained unchanged.

The ready market volumes stood at 135.415 billion shares, as compared with the turnover of 134.604 billion shares in the previous session.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks fell across the board on reports pointing to Pakistan Stock’s exclusion from the MSCI emerging market on failing to meet the free float rules in the MSCI EM annual review by June 2019.”

IMF condition for absolute transparency over Pakistan’s debts to review bailout package, dismal data on trade deficit, weak corporate earnings outlook amid surge in interest rates, and rupee depreciation played a catalytic role in the bearish close, Mehanti added.

An analyst said that if United States created hurdles, and Pakistan had to face difficulties in getting loans from the IMF, the economic depression would widen and investment in stock market as well as in industries might be halted, which could lead to slower growth in the economy.

The highest gainers were Rafhan Maize, up Rs108.00 to close

at Rs7,299.00/share, and Khyber Textile, up Rs19.33 to finish at Rs405.97/share.

Companies that booked highest losses were Island Textile, down Rs86.94 to close at Rs1,651.94/share, and Bata Pakistan, down Rs65.22 to close at Rs1,640.78/share.

K-Electric Limited recorded the highest volumes with a turnover of 8.860 million shares.

The scrip gained Rs0.1 to close at Rs5.21/share.

The lowest volumes were witnessed in TRG Pakistan Limited, recording a turnover of 10.038 million shares, and losing Rs1.18 to end at Rs22.54/share.