KARACHI: Stocks closed lower on Monday as political uncertainty and a weakening rupee weighed on investor sentiment, dealers said.
The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index dropped 1.6 percent, or 770.54 points, to end at 47,447.96 points.
The highest index of the day remained at 48,234.26 points while the lowest level of the day was recorded at 47,432.72 points.
"Stocks fell across the board amid uncertainty over the outcome of the President's alarming disclosure on refuting to the signing of the Pakistan Army and Official Secrets Bills laws approved," said Ahsan Mehanti, analyst at Arif Habib Corp.
He said a slump in the rupee, investor concerns over a $809 million current account deficit in July and weak earnings outlook amid expected further hikes in power tariff and oil prices played a catalyst role in the bearish close. The KSE-30 index, which tracks the performance of 30 blue-chip companies, also fell 1.77 percent, or 302.71 points, to close at 16,827.57 points.
Trading volume decreased to 211.23 million shares from 254.81 million shares on Friday, while trading value dropped to Rs7.08 billion from Rs10.41 billion rupees. Out of 323 companies traded, 50 closed higher, 253 lower and 20 unchanged.
Ali Najib, analyst at Topline Securities, said equities started the week with a modestly positive opening, only to succumb to a rapid selling spree shortly after the market opened. "Unfavourable factors weighed heavily throughout the day," Najib said.
He said the current account, which had shown a surplus for four consecutive months, faced a deficit in July.
Najib also cited the announcement of the refinery policy, which came with incentives that were lower than expected by investors, and the lack of update on the circular debt management plan as factors that contributed to the bearish trend.
Among the major decliners were United Bank Ltd, Oil and Gas Development Co Ltd, Habib Bank Ltd, Hub Power Co Ltd and TRG Pakistan Ltd, which collectively accounted for a decrease of 262 points.
The top gainers were Mehmood Textile Mills Ltd, which rose by 6.2 percent to Rs734.95 per share, and Sanofi-Aventis Pakistan Ltd, which increased by 2.5 percent to Rs820 per share.
The biggest losers were Nestle Pakistan Ltd, which fell by 2.7 percent to Rs7,200 per share, and Rafhan Maize Products Co Ltd, which decreased by 1.6 percent to Rs8,450 per share.
Arif Habib Ltd said in a note that after a subdued session on Monday, the support zone of 46,000-47,000 points was now drawing near, reinforcing its significance.
"The level of 48,000 points is currently emerging as a strong resistance point as the index progresses toward the anticipated support zone of 46,000-47,000 points," it said.
"It is expected that the market will find a base within this range before resuming its upward trajectory towards the 50,000 points milestone."
WorldCall Telecom Ltd remained the volume leader with 51.42 million shares traded, closing higher by 0.02 rupees to Rs1.27 per share. It was followed by K-Electric Ltd with 8.42 million shares traded, closing higher by 0.05 rupees to Rs2.23 per share.
Other significant turnover stocks included Oil and Gas Development Co Ltd, Pakistan Refinery Ltd, Pakistan Petroleum Ltd, Pakistan Aluminium Beverage Cans Ltd, Nishat Power Ltd Nishat Chunian Power Ltd, Lalpir Power Ltd and Dewan Motors Pvt Ltd. Shares' turnover in the future contracts increased to 176.67 million shares from 76.97 million shares on Friday.