Stocks fall as investors remain wary of poor macro, political chaos

Stocks closed in red on Friday as investors preferred to remain on the sidelines owing to poor macroeconomic indicators and political uncertainty related to the appointment of the new care taker government, dealers said.

Analyst Ahsan Mehanti at Arif Habib Corporation said that stocks closed lower amid pressure in scrips across the board on concerns for falling foreign currency reserves, surging current account and trade deficit data for July-April 2018.

“We reckon that any positive triggers could act as helpful stimuli in supporting the market to trade within the current range; otherwise, the free-fall might continue pushing the domestic bourse to test its support,” the analyst said.

Surging US crude prices and reduced taxation on the banking sector announced in the federal budget invited support in oil and banking stocks. Foreign outflows and ongoing political uncertainty played a catalytic role in the lower close, he added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index shed 0.59 percent or 246.13 points to close at 41,623.52 points. KSE-30 shares index shed 0.68 percent or 138.96 points to close at 20,313.90 points. As many as 313 scrips were active of which 78 advanced and 218 declined, whereas 17 remained unchanged.

The ready market volumes stood at 82.848 million shares as compared to the turnover of 56.937 million shares a day earlier.

Ismail Iqbal Securities in its post-market note said the benchmark started off with a positive note, but failed to sustain gains despite the news that the National Assembly passed the Finance Bill 2018. The negative sentiment was partly attributable to political uncertainty.

However, it said the turnover slightly improved to 82.8 million shares compared to 56.9 million shares traded in the last session.

The Economic Coordination Committee has informed Oil and Gas Development Company Ltd to enhance the unaccounted for gas (UFG) benchmark from five percent to 7.6 percent to recover losses. The Brent/WTI crude futures also hit the highest level of $80/barrel since November 2014. However, oil stocks remained low, with OGDC down 0.02 percent, Pakistan Petroleum Limited down 1.08 percent, and Pakistan Oilfields down 1.23 percent.

Companies with the highest gains included Murree Brewery, up Rs31.24 to close at Rs756.49/share, and Bata Pakistan, up Rs30.01 to close at Rs2,279.00/share.

Companies registering the most losses were Hinopak Motor, down Rs40.92 to close at Rs1,000.00/share, and Khyber Tobacco, down Rs17.44 to close at Rs666.56/share. Highest volumes were witnessed in Sui Southern Gas Company with a turnover of 5.563 million shares.

The scrip gained 82 paisas to close at Rs36.86/share. It was followed by ENGRO Polymer with a turnover of 4.986 million shares. Its scrip gained 7 paisas to close at Rs34.71/share. Lowest volumes were witnessed in K-Electric Limited with a turnover of 5.874 million shares. Its scrip lost 11 paisas to close at Rs6.01/share.