Stocks snap 7-day gaining streak as political noise weighs

Stocks on Thursday swung into profit-taking to snap their seven-day gaining streak after National Accountability Bureau (NAB) issued arrest warrants for Finance Minister Ishaq Dar and Lahore High Court ordered the release of Model Town incident investigation report, dealers said.

“Market closed lower amid thin trade because of political uncertainty and concerns over Pakistan-US trade relations, falling global crude prices, rising public debt, and the fate of country’s GSP plus status that is likely to have an impact on exports,” Ahsan Mehanti at Arif Habib Corp said. The Pakistan Stock Exchange's benchmark KSE-100 shares index shed 1.32 percent or 571.99 points to close at 42,775.04 points, while KSE-30 shares index lost 1.6 percent or 356.47 points to finish at 21,909.35 points, whereas out of 402 active scrips, 90 advanced, 279 declined, and 33 remained unchanged.

The ready market volumes stood at 165.709 million shares compared to a turnover of 222.993 million shares a day earlier. An analyst at Elixir Securities said equities ended up in the red zone after benchmark KSE-100 index snapped the seven-day gaining streak by losing as much as 1.3 percent.

“Domestic political noise mainly triggered anxiety among investors as courts not only froze assets and issued arrest warrants against the finance minister Ishaq Dar but also ordered Punjab government to make a judicial report of Model Town incident public.”

Consequently, the wider market remained in red throughout the session and the benchmark Index even slipped below the 43,000-point psychological support level in the final hour of trading on institutional selling in index heavy names.

Many heavyweights from the banking sector including Habib Bank Limited (HBL), down 2.0 percent, MCB Bank (MCB), down 3.0 percent, and United Bank Limited (UBL), down 1.5 percent, contributed to the losses in the overall market, whereas Pakistan Oilfields Limited (POL), down 1.72 percent, and Pakistan Petroleum Limited (PPL), down 1.26 percent, witnessed profit taking. Going forward, concerns over domestic politics and macros will continue to dampen sentiments in the near-term, while institutional flows, primarily from foreigners, will remain crucial (down the line), for breaking the current bearish run. Linde Pakistan, which went up by Rs13.44 to close at Rs282.39/share and Blessed Textile that strengthened by Rs10.75 to close at Rs225.77/share, were the highest scoring companies.

On the other hand, the highest losers turned out to be Sapphire Textile, which lost Rs102.23 to close at Rs1942.52/share and Nestle Pakistan that shed Rs100.01 to finish at Rs12899.99/share. The highest volumes were witnessed in the trade of K-Electric, having a turnover of 12.527 million shares. The power utility’s scrip gained 08 paisas to close at Rs6.24/share. In the race of volume, Sui Southern Gas Company Limited was the runner-up with a turnover of 11.233 million shares, shedding 07 paisas to close at Rs38.52/share. Engro Polymer stood third with a turnover of 9.937 million shares, surging by 54 paisas to finish at Rs33.01/share.