Stocks suffer more losses tracking global selloff

September 23, 2020

Stocks on Tuesday piled up losses on the heels of a global rout, triggered after 'FinCen Leaks' revealed that some global banks were involved in massive money laundering operations, while domestic...

Share Next Story >>>

Stocks on Tuesday piled up losses on the heels of a global rout, triggered after "FinCen Leaks" revealed that some global banks were involved in massive money laundering operations, while domestic economic concerns also proved a downer, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.82 percent or 345.23 points to close at 41,828.91 points level. Volumes slightly improved to 441.286 million shares, as compared with the turnover of 433.941 million shares in the previous session.

Topline Securities in a note said, “Ongoing rollover week coupled with a sell-off in global markets and decline in international oil prices dragged the index below the psychological support level of 42,000”.

Major banks, including HBL, UBL, and MCB cumulatively dented the index by 65 points, the brokerage said adding that autos, refineries, and OMCs followed suit while E&P sector closed 1.5 percent lower.

Tahir Abbas, director research at Arif Habib Limited, said, “Since the start of this week world markets have been in a rout owing to FinCen leaks and that pessimism also trickled into Asian markets and Pakistani equities were no exception”.

“FinCen or the data leaks of global banks about money laundering put tremendous pressure on the financial markets and capital markets from Tokyo to New York suffered colossal losses, impacting local listed banks,” Abbas said. Tracking the main index, KSE-30 shares index also lost 1.08 percent or 193.23 points to end at 17,696.62 points level.

Analyst Ahsan Mehanti from Arif Habib Corporation, said, “Stocks closed lower amid thin trade on concerns for rout in global equities, global crude oil prices”. Industrials outperformed on reports over Rs517 billion petitions to Supreme Court to review GIDC levies, he added.

“Political uncertainty, ADB projections on slower than earlier projected GDP growth rate for FY21 and plunge in textile exports by 15.4 percent in August 2020 pinned the market down,” Mehanti said.

Fahad Rauf, deputy head of research at Ismail Iqbal Securities, said, “Weak international markets amid rising fears of second coronavirus wave, and ongoing rollover week dragged the market down”.

“The central bank kept policy rate unchanged, while hinted towards higher than earlier expected inflation in FY21, which has also raised interest rate reversal expectations in next 6-9 months,” Rauf added. Trading activity was recorded in 428 active scrips, of which 121 ended higher, 288 lower, and 19 closed unchanged.

Muhammad Saeed Khalid, head of research at Shajar Capital said, “Volatility continued in the market mainly on the uncertainty over the political scene along with the expectation of announcement of C/A deficit mainly on the decline in export numbers for August 2020”.

“Further, foreigners continued to offload their holdings in the market as foreign fund houses have sold equities worth $16.72 million as of September 2020,” Khalid added.

The top gainers were Indus Dyeing, gaining Rs37.87 to close at Rs542.88/share, and Murree Brewery, up Rs34.61 to finish at Rs663.11/share, while Colgate Palmolive, down Rs69.93 to close at Rs2900.07/share, and Sapphire Textile, losing Rs41.51 to close at Rs850.00/share, were the main losers.

With 31.356 million shares, Hascol Petrol was the volume leader and it lost Rs0.65 to end at Rs20.91/share, whereas Jahangir Siddqiui Corporation’s turnover was the thinnest with 11.187 million and it gained Rs2.02 to end at Rs29.06/share.

More From Business