Stocks fall with energy shares as oil prices drop

Stocks closed lower on Thursday -- the first working day after Eid holidays as investors fretted about global oil prices and major activity was witnessed in small and mid-cap stocks, dealers said.

Analyst Ahsan Mehanti at Arif Habib Corp said stocks closed bearish amid pressure in oil stocks after crude prices slump below $44/barrel. “Falling cotton prices, political uncertainty and consolidation in the post earning season played a catalyst role in the bearish close,” Mehanti said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index fell 0.28 percent or 113.95 points to close at 40,216.35 points.

The highest index of the day remained at 40,355.11 points while the lowest level of the day was recorded at 40,135.22 points. KSE-30 Index also fell 0.67 percent or 153 points to close at 22,602.17 points.

Turnover fell by 106 million shares to 531.16 million shares, trading value decreased to Rs11.42 billion against Rs16.24 billion. Market capital dropped to Rs8.09 trillion from Rs8.11 trillion.

Out of 422 companies’ active in the session, 232 recorded in green, 180 in red while 10 remained unchanged.

Ali Raza, analyst at Elixir Securities, said soon after the opening bell, stocks skidded lower with index heavy exploration and productions (E&Ps) taking the lead in declines as investors tracked eight percent dip in global crude prices. Oil and Gas Development Company closed down 2.3 percent, Pakistan Oilfields fell 1.4 percent and Pakistan Petroleum shed 0.6 percent.

Cements and financials closed mixed on selective interest in third tier stocks and Bank of Punjab (up 9.7 percent) and Dewan Cement (down 4.1 percent) generating most activity, while index heavy United Bank Limited (down 2.88 percent) led the declines and contributed most to day's losses on KSE-100.

Hub Power Company (down 1.2 percent) also failed to perform despite positive morning news that NEPRA has issued generation license to its JV China Power Hub Generation Company, as rumors of a possible restriction to use imported coal for power generation by GoP spooked investors.

Overall, activity remained focused in small and mid caps with many retail favorites surging by over 10 percent intra-day.

Highest increase was recorded in shares of Hinopak Motor, which rose by Rs50.59 to Rs1,062.42/share, followed by Ferozsons (Lab) that increased by Rs42 to Rs882.13/share.

Major decline was noted in shares of Colgate Palmolive XD, which fell by Rs39 to Rs1,501/share, followed by Island Textile that decreased by Rs28.85 to Rs1,315.55/share.

Significant turnover was recorded in stocks of Pace (Pak) Ltd, Bank of Punjab, Azgard Nine, TRG Pak Ltd, Pakistan International Airlines, Dewan Salman, Summit Bank, Aisha Steel Mill, WorldCall Telecom and Nimir Resins.

Pace (Pak) Ltd remained the volume leader with 50.69 million shares with an increase of 84 paisas to Rs9.27/share. It was followed by Bank of Punjab with 42.94 million shares with an increase of Re1.00 to Rs11.31/share.

Shares’ turnover in the future contracts decreased to 40.14 million shares from 50.28 million shares traded in the previous session.