Stocks fall on IMF’s bleak review of Pakistan’s economy

Stocks closed 0.6 percent down on Wednesday, slipping for the second consecutive session as International Monetary Fund (IMF) in its monitoring report expressed concerns over the country’s macroeconomic imbalance and political uncertainty, dealers said.

An analyst at Arif Habib Limited said KSE-100 took negative turn, caused by selling pressure in blue chips.

“Part of IMF’s concluding remarks, relating to macroeconomic imbalance and ballooning current account deficit, were taken negative by the investors causing selling pressure,” the analyst added.

The IMF noted that continued erosion of macroeconomic resilience could put growth outlook at risk.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index shed 0.60 percent or 263.92 points to close at 43,441.18 points. KSE-30 shares index shed 0.69 percent or 150.82 points to close at 21,845.33 points. As many as 365 scrips were active of which 103 advanced, 240 declined and 22 remained unchanged.

The ready market volumes stood at 142.428 million shares as compared with the turnover of 177.59 million shares a day earlier.

Analyst Ahsan Mehanti at Arif Habib Corp said stocks closed lower in line with global equities selloff and IMF’s concerns over ongoing political uncertainty.

“Autos and banking scrips outperformed on reports of rising banking spreads and reports of surging auto sales. However, foreign outflows and uncertainty in global equities played a catalytic role in the bearish close at the PSX,” he added.

Dealers said comparatively low volumes were seen traded in cement Sector. DG Khan Cement down 0.9 percent, Fauji Cement down 3.25 percent, and Maple Leaf Cement down 4.14 percent showed low volumes and selling, despite increased cement price in north zone. Lucky Cement, down 1.5 percent saw accumulation at the end of the session, when market started losing points at pace.

Late session buying was witnessed in some index names including United Bank, up 0.9 percent, Dawood Hercules, up 1.1 percent, Hub Power, up 0.3 percent and Nishat Mills, up 0.6 percent.

Going forward, analysts see news flow on economic and politics front to guide the market.

Companies with the highest gains included Rafhan Maize, up Rs379.95 to close at Rs7,978.95/share, and Unilever Foods, up Rs200 to close at Rs9,500/share.

Companies reflecting most losses include Pakistan Tobacco, down Rs405 to close at Rs1,995.1/share, and Sanofi Aventis, down Rs77.75 to end at Rs1,477.25/share.

Highest volumes were witnessed in Matco Foods with a turnover of 12.79 million shares. The scrip gained Rs1.38 to close at Rs31.60/share.

Pakistan International Airlines was second with a turnover of 9.47 million shares. It gained 24 paisas to close at Rs5.56/share.

Unity Foods was third with a turnover of 6.29 million shares. It shed Rs1.01 to close at Rs26.57/share.