Stocks plunge 1.48pc as cipher case verdict rattles investors

Stocks fell more than 1.4 percent on Tuesday, extending losses for a fourth straight session, as political uncertainty and security unrest weighed on investor sentiment ahead of next week’s general elections, dealers said

The Pakistan Stock Exchange’s benchmark KSE 100-share Index closed down 931.98 points or 1.48 percent at 61,841.74 points. The index traded in a wide range of 1,437 points, hitting an intraday high of 63,074.51 points and a low of 61,637.62 points. The KSE-30 index decreased by 272.43 points or 1.29 percent to close at 20,873.39 points.

Dealers said the market was spooked by a special court’s decision to sentence former prime minister Imran Khan and former foreign minister Shah Mahmood Qureshi, to 10 years in prison in cipher case, raising fears of political instability and protests.

“The verdict has created a lot of uncertainty and confusion in the market, as it could trigger a backlash from the PTI and Imran Khan's supporters,” said a dealer. “The market is in a bearish mode and there is no positive trigger in sight.”

Dealers said the market was also under pressure from foreign selling, which amounted to aroundd $17 million in the last two sessions, as well as security concerns after a series of militant attacks in the country.

Ahsan Mehanti, an analyst at Arif Habib Corp, said the weak economic outlook, pending fiscal reforms, power sector debt crisis and a widening budget deficit also dampened investor confidence.

Traded shares increased by 119 million shares to 436.120 million shares from 317.577 million shares. The trading value rose to Rs15.286 billion from Rs10.693 billion. Market capital narrowed to Rs9.077 trillion against Rs9.243 trillion. Out of 346 companies active in the session, 76 closed in green, 249 in red and 21 remained unchanged.

Analyst Naveed Nadeem at Topline Securities said benchmark index exhibited a trading range of 1,437 points, reaching an intraday high of 63,075 and a low of 61,638 points. As a result, COLG, MEBL, ENGRO, OGDC, and MARI collectively had a negative impact, contributing to a decline of 350 points on the index.

The highest increase was recorded in Rafhan Maize Products Company Limited, which rose by Rs400 to Rs9,200 per share, followed by Bata Pakistan Limited, which increased by Rs20 to Rs1,760 per share. A significant decline was noted in Unilever Pakistan Foods Limited, which fell by Rs1,687.50 to Rs20,812.50 per share, followed by Colgate-Palmolive (Pakistan) Limited, which closed lower by Rs109.27 to Rs1,444.33 per share.

Brokerage Arif Habib Ltd said share prices also exhibited weakness, as only 15 stocks gained and 77 fell.

Notably, COLG (-7.03 percent), MEBL (-3.48 percent), and ENGRO (-2.87 percent) exerted significant downward pressure on the index, while MCB (+1.45 percent), HUBC (+0.5 percent), and RMPL (+4.55 percent) contributed positively to the upside.

"With four consecutive down days, the potential for a near-term bounce is increasing, although near-term resistance at 63,000 points is expected to limit relief rallies," the brokerage said. "Looking ahead to February, moves targeting 59,000 points are anticipated."

K-Electric Ltd. remained the volume leader with 52.895 million shares which closed lower by 20 paisas to Rs4.65 per share. WorldCall Telecom followed it with 29.219 million shares, which closed lower by 2 paisas to Rs1.23 per share.

Other significant turnover stocks included Hascol Petrol, P.T.C.L., Pak Refinery, Fauji Foods Ltd, Pak Petroleum, Oil & Gas Dev., B.O. Pujab and Air Link Commun.

A total of 319 companies recorded future shares, of which 34 increased, 283 decreased and 2 remained unchanged.