Stocks down 1,991 points amid future contracts rollover pressure

KARACHI: Stocks fell 1,991 points on Thursday amid security concerns on the border and pressure on future contracts’ rollover.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index decreased by 1,991.49 points or 1.77 per cent to 110,423.32 points against 112,414.81 points recorded in the last session. The highest index of the day remained at 112,480.6 points, while the lowest level was recorded at 109,858.88 points.

Ahsan Mehanti, an analyst at Arif Habib Corp, said, “Stocks fell sharply lower amid political uncertainty, concerns over the cautious SBP policy easing and uncertainty over the outcome of slippages on tax collection [targets set by the IMF].”

He said that pressure on future contracts’ rollover, weak rupee and foreign outflows played a catalyst role in the bearish activity. The KSE-30 index decreased by 730.12 points or 2.06 per cent to 34,778.04 points against 35,508.15 points.

Traded shares decreased by 252 million shares to 628.026 million shares from 880.598 million shares. The trading value dropped to Rs33.582 billion from Rs54.455 billion. Market capital narrowed to Rs14.014 trillion against Rs14.251 trillion. Of the 450 companies active in the session, 113 closed in green, 284 in red and 53 remained unchanged.

Analyst Naveed Nadeem at Topline Securities said that the benchmark index experienced a decline, closing the session at 110,423 points, down by 1,991 points or 1.77 per cent.

“The market has been influenced by increased leverage and the expiry of December contracts,” he said. “Furthermore, the ongoing security concerns at the borders are affecting investor sentiment.”The primary drivers of the downward movement were FFC, OGDC, PPL, MARI and LUCK, which collectively accounted for an alarming 996 points of the index’s overall decline.

The highest increase was recorded in Nestle Pakistan Limited, which rose by Rs198.81 to Rs7,430.81 per share, followed by Mitchells Fruit Farms Limited, which increased by Rs17.44 to Rs266.05 per share. A significant decline was noted in Unilever Pakistan Foods Limited, which fell by Rs232.6 to Rs20,767.41 per share; Rafhan Maize Products Company Limited followed it, which closed lower by Rs198.1 to Rs9,001.9 per share.

Analyst Muhammad Hasan Ather at JS Global said, “This decline was driven by rising leverage, year-end portfolio adjustments and security concerns at the borders. Despite the bearish sentiment, the market’s trailing earnings yields suggest potential for above-average long-term returns.”

He added, “Falling interest rates and lower returns on alternative investments indicate that equities will remain attractive, providing promising opportunities for investors moving forward.”

Fauji Foods Ltd remained the volume leader with 93.341 million shares, which closed higher by Rs1.44 to Rs16.39 per share. WorldCall Telecom, with 49.879 million shares, followed it, which closed lower by 6 paisas to Rs1.72 per share.

Other significant turnover stocks included TRG Pak Ltd, BO Punjab, Hascol Petrol, K-Electric Ltd., Silk Bank Ltd, Fauji Cement, Cnergyico PK and Pak Elektron. In the futures market, 303 companies recorded trading, 67 of which increased, 234 decreased, and 2 remained unchanged.