Stocks slip nearly 1pc on political, economic concerns

Stocks dropped by almost a percent on Thursday amid selling pressure in oil, gas and other selected scrips following negative happenings on the political front and reports that the government will likely present a minibudget in the middle of the next month to bridge revenue shortfall, dealers said.

Adil Ghaffar, CEO of First Equity Modaraba said lack of interest was being experienced since over a week, and shrinking volumes speak clearly. With rising cost of doing business, the viability of brokerage business raises alarms.

“The investors are mostly focusing on the announcement of the minibudget, and its outcome as to what kind of measures will be announced, he added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.95 percent or 364.50 points to close at 37,853.57 points level. KSE-30 shares index followed suit with a low of 1.32 percent or 237.43 points to end at 17,724.02 points level. Of 361 active scrips, 101 moved up, 239 retreated, and 21 remained unchanged. The ready market volumes stood at 103.728 billion shares, as compared with the turnover of 88.568 million shares in the previous session.

Analyst Murtaza Jaffar from Elixir Securities said the market did not remain calm, as the government placed former president Asif Ali Zardari on the Exit Control List due to the ongoing graft cases against him.

“With hopes of year-end window dressing now mostly out of the window, we expect market to consolidate at current levels (supports defined at 37,600-37,800) as investors’ await for the next round of negotiations between the government and IMF in mid-Jan,” he added.

International oil prices posted their strongest daily gain in more than two years in a partial rebound from steep losses. Both US and Brent crude rose about eight percent, their largest one-day increase since November 30, 2016, resultantly, refineries closed in the red, dragged by Attock Refinery, down 5 percent, National Refinery, down 4.1 percent, and Pakistan Refinery, down 2.8 percent.

Reports that the government has raised increased cut-off yields of Pakistan Investment Bonds to 12.25 percent, 12.7 percent, and 13.15 percent for 3-, 5- and 10-year papers, respectively, augured negatively for the market.

E&P stocks continued to remain under pressure as fears of oversupply have kept international crude oil prices down. Refineries were under pressure due to the news that the prime minister has asked authorities to generate electricity from LNG and coal in future instead of high cost FO-based electricity.

SSGC, down 2.30 percent, and Sui Northern Gas, down 4.16 percent, closed in red despite the development that OGRA has allowed the companies to lodge maximum of their claims on account of theft and losses. The highest gainers were Pakistan Tobacco, up Rs88.41 to close at Rs2,888.41/share, and Murree Brewery, up Rs30.58 to finish at Rs839.42/share.

Companies that booked highest losses were Phillip Morris Pakistan, down Rs171.99 to close at Rs3,284.01/share, and Nestle Pakistan, down Rs150.00 to close at Rs9,000.00/share. K-Electric Limited recorded the highest volumes with a turnover of 12.752 billion shares. The scrip gained Rs0.01 to close at Rs6.04/share. The lowest volumes were witnessed in Pakistan Elektron, recording a turnover of 3.648 million shares, and losing Rs0.45 to end at Rs26.80/share.