Blue-chip stocks drag down index as political sell-off starts

Shares fell over one percent on Monday as investors scurried to cut back their exposure in blue-chip stocks on prevailing political standoff between the government and opposition on Panama papers issue, dealers said.

Analyst Ahsan Mehanti at Arif Habib Limited said stocks fell across the board amid political uncertainty and investor concerns over outcome of Supreme Court hearing against Panama papers case.

Dismal current account data for Jul-Sept period, opposition sit-in call in the capital next week, subdued auto sales data for the month of September and foreign outflows forced bears to dominate during the trade, he said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index shed 1.06 percent or 439.40 points to close at 40,852.03 points. The highest index of the day remained at 41,291.43 points, while the lowest level of the day was recorded at 40,793.56 points. KSE-30 Index also decreased fell 0.85 percent or 192.27 points to close at 22,297.20 points.

Turnover fell by 252 million shares to 277.92 million shares, trading value decreased to Rs9.47 billion from Rs16.38 billion, while market capital narrowed to Rs8.34 trillion against Rs8.42 trillion. Out of 440 companies’ active in the session, 71 closed in green, 348 in red and 21 remained unchanged.

Global Research said the local bourse once again succumbed to political pressure over potential inquiry of the Panama leaks and fell over 300 points as soon as the session commenced. The market continued to remain under pressure throughout the day, it said in a post market report.

The cement sector witnessed another bearish spell with most of the companies closing in the red as international coal prices touched another recent high of $85/ton, it added.

Apart from HBL (up 0.80 percent), which contributed 23 points, commercial banks also came under pressure on institutional and foreign selling. Other major gainers were HUBC (up 0.88 percent) and HASCOL (up 3.13 percent), cumulatively contributed 24 points.

The day’s laggards were UBL (down 1.83 percent), ENGRO (down 2.02 percent), and MCB (down 1.51 percent) which eroded 93 points from the index. “We expect the market will trade in a volatile manner (in the near-term) in light of recent political noise,” the report said.

Highest increase was recorded in shares of Unilever Foods XD, which rose by Rs192 to Rs5,690/share, followed by Nestle Pakistan that increased by Rs99 to Rs8,399/share. Major decline was noted in shares of Wyeth Pak Ltd, which fell by Rs100.37 to Rs2,687.14/share, followed by Rafhan Maize that decreased by Rs100 to Rs7,600/share.

Significant turnover was recorded in stocks of Bank of Punjab, K-Electric Ltd, Pakistan International Airlines (A), Dost Steel (R), Dewan Motors, TRG Pak Ltd, Pace (Pak) Ltd, Japan Power, Summit Bank and Sui Southern Gas Company Limited.

Bank of Punjab remained the volume leader with 35.20 million shares with a drop of 91 paisas to Rs17.25/share. It was followed by K-Electric Ltd with 21.49 million shares with an increase of three paisas to Rs9.12/share.

Shares’ turnover in the future contracts decreased to 90.19 million shares from 99.93 million shares traded in the previous session.