Stocks ended lower on Monday extending losses into the new week as the government’s economic irresolution gave investors cold feet, confining them to the sidelines and at the same time triggering institutional selling in select sectors, dealers said.
Topline Securities in its daily market review said equities continued their losing streak for the fourth consecutive day, shedding cumulatively 1,070 points amid absence of any trigger. “Investors’ confidence shattered as the ECC (Economic Coordination Committee) remained unable to form economic roadmap to address critical issues like burgeoning circular debt, depleting foreign exchange reserves, and pending gas price hike,” the Topline report said.
Ahsan Mehanti from Arif Habib Corporations said the bearish sentiments remained amid institutional selling in selected scrips across board on weak earnings outlook. “Reports of surging local cement and fertiliser prices, rising banking spreads supported the index to close above days low,” Mehanti added.
He said investor concerns over Rs1.18 trillion unresolved circular debt crisis and foreign outflows brought about a bearish close at the apex bourse. Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index fell 0.42 percent or 170.72 points to close at 40,684.05 points, while its KSE-30 shares index fell 0.51 percent or 101.66 points to end at 19,996.75 points.
As many as 357 scrips were astir today, of which 133 moved up, 206 retreated, and 18 remained unchanged. The ready market volumes stood at 112.552 billion shares as compared with the turnover of 120.864 billion shares in the previous session.
Shumaila Badar, head of research at Ismail Iqbal Securities said the market was under pressure through most of the session today partly because of fears that the government would slash its development budget by Rs250 billion, which would adversely affect cement Sector.
There were also fears that China-Pakistan Economic Corridor (CPEC) projects may be renegotiated, which were rebutted later in the day by an advisor to the Prime Minister, Badar said. Further, she said, fears of ECC’s approving a gas price hike were partly allayed later in the day.
“We expect the market to continue to remain jittery ahead of the mini-budget”, Badar added. The stock market was under tremendous pressure following the commencement of the ECC in Islamabad, where gas price was on the top of its agenda. By the time the postponement decision made news, the damage was done. The postponement helped the index to recover but Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGP) landed in the red zone.
The highest gainers were Murree Brewery, up Rs29.51 to close at Rs766.18/share, and Bata Pakistan, up Rs17.20 to finish at Rs1820.00/share. Companies that booked highest losses were Unilever Foods, down Rs374.47 to close at Rs7124.53/share, and Rafhan Maize, down Rs200.00 to close at Rs7600.00/share.
Unity Foods Limited recorded the highest volumes with a turnover of 9.656 million shares. The scrip gained Rs1.74 to close at Rs39.23/share. The lowest volumes were witnessed in Engro Polymer, recording a turnover of 5.265 million shares, the scrip lost Rs0.09 to end at Rs32.79/share.