Stocks drop 1pc as political noise triggers foreign selling

Stocks closed one percent down on Thursday with growing political noise post former prime minister Nawaz Sharif’s statement and rising macroeconomics concerns leading to lowest value traded in over four years, dealers said.

Zeeshan Afzal, head of research at Insight Securities, said short trading hours, escalating political chaos post statement of former prime minister Nawaz Sharif and rising concerns over macros led to worst participation level with lowest market value traded since July 9, 2014.

“As expected bourses continued negative momentum with extremely reduced activity on account of first day of Ramazan,” he added.

Foreign selling also shattered the confidence of domestic investors, as in the last two sessions foreign selling amounted in excess of 13 million dollars, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index shed 1.02 percent or 431.55 points to close at 41,869.65 points. KSE-30 shares index shed 1.32 percent or 273.00 points to close at 20,452.86 points. As many as 307 scrips were active of which 72 advanced and 219 declined, whereas 16 remained unchanged.

The ready market volumes stood at 59.937 million shares as compared to the turnover of 77.526 million shares in the last session.

Analyst Ahsan Mehanti at Arif Habib Corporation said, “Panic gripped investor sentiments at PSX amid thin trade on the first day of Ramazan on concerns for economic uncertainty, foreign outflows and political noise.”

Surging circular debt crises, trade and external account imbalances, and uncertainty over financing $91.8 billion external debt played a catalytic role in the bearish close, he added. All key sector posted immense pressure with couple of blue-chip stocks dropping more than three percent for the session.

The last hour saw a bloodbath and notable sectors underwent meltdown such as steels down 3.6 percent, cements down 2.7 percent, and oil refinery and marketing losing 2.4 percent over institutional selling while support at lows from serious buyers remained absent.

DG Khan Cement lost 2.3 percent on talks of delay in their south plant, upcoming supply glut, and devaluations.

Companies with the highest gains included Pakistan Tobacco, up Rs90.50 to close at Rs1,913.00/share, and Bata Pakistan, up Rs83.99 to close at Rs2,248.99/share.

Companies with the most losses were Murree Brewery, down Rs24.75 to close at Rs725.25/share, and Indus Motor, down Rs17.95 to close at Rs1,605.49/share.

Highest volumes were witnessed in K-Electric Limited with a turnover of 4.834 million shares. The scrip gained 5 paisas to close at Rs6.12/share.

Lowest volumes were witnessed in Pakistan Elektron with a turnover of 6.997 million shares. Its scrip lost Rs1.93 to close at Rs36.95/share.