Stocks stay negative, as economic uncertainty irks investors

KARACHI: Stocks closed in red on Tuesday, as investors remain jittery over the economy and expect the government to make some major announcements for the textile and auto sectors, dealers said.

Shumalia Badar, head of research from Ismail Iqbal Securities said the market was bearish as investors waited for news on possible hike in electricity tariff. Financials were major contributors to the benchmark KSE-100 index declines due to profit booking after last week’s rally, and subdued inflation posting for the month of September. On the other hand, oil and gas E&P stocks supported the index because of the elevated level of international crude oil prices.

“Going forward we expect negativity to persist in the market,” she said. Pakistan Stock Exchange (PSX) KSE-100 shares index fell 0.32 percent or 129.19 points to close at 40,800.25 points. KSE-30 shares index fell 0.22 percent or 43.15 points to end at 19,842.89 points.

As many as 347 scrips were active in the session, of which 151 moved up, 180 retreated, and 16 remained unchanged. The ready market volumes stood at 106.509 billion shares as compared with the turnover of 106.259 billion shares in the previous session. Analyst Ahsan Mehanti from Arif Habib Corporations said, “Bearish trend continued amid investor concerns for dismal data on core inflation at eight percent for September 2018.”

Oil and cement stocks outperformed on surging global oil prices and local cement prices, he said. “Volatile rupee dollar parity, surge in SBP key policy rate, higher fiscal deficit and external account imbalances, and uncertainty over government decisions on new IMF program played a catalytic role in the bearish close,” he added.

Auto shares were once again on the losing side, as investors were waiting for the final release of the amended finance bill with the government’s decision allowing non-filers to buy new cars.

A strong group has been forcing the government to revert this decision. Since the confusion, the auto sector shares lost significantly. Once again, Indus Motor and Millat Tractors lost sharply by Rs19.75 and Rs8.58, respectively.

Textile shares also lost ground, as investors and financial institutions anxiously wait for the announcement of some package for the industry. The expectations were triggered last week that the government would announce a package to boost exports and improve sales of the sector.

An analyst said if electricity rate was increased, all the manufacturing sectors would suffer the brunt, including textile companies. The highest gainers were Colgate Palmolive, up Rs49.89 to close at Rs2,350.00/share, and Bata Pakistan, up Rs20.00 to finish at Rs1,879.00/share.

Companies that booked highest losses were Pakistan Tobacco, down Rs129.25 to close at Rs2,460.75/share, and Island Textile, down Rs85.29 to close at Rs1,620.70/share. Descon Oxychem recorded the highest volumes with a turnover of 4.902 million shares. The scrip gained Rs1.47 to close at Rs31.01/share. The lowest volumes were witnessed in Unity Foods Limited, recording a turnover of 9.228 million shares. The scrip lost Rs0.93 to end at Rs31.06/share.