Stocks end flat in triggerless trade; investors await IMF decision

Stocks ended flat on Tuesday on selected buying in textile, cement, and other second-tier stocks, as investors are waiting for the outcome of the meeting between Pakistani and International Monetary Fund (IMF) officials, dealers said.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks showed recovery as investors weighed upbeat data on auto sales, exports and home remittance in October 2018.”

Major fall in US equities and global crude prices invited mid-session pressure. Investor speculations ahead of announcements on terms of IMF bailout package, and schedule of financial assistance from China and UAE eased external account crises, which played a catalytic role in the bullish close at the PSX, he added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.14 percent or 55.95 points to close at 41,152.28 points level. KSE-30 shares index followed suit with a gain of 0.01 percent or 1.34 points to end at 19,709.04 points level.

As many as 362 scrips were active in today’s session, of those 159 moved up, 179 retreated, and 24 remained unchanged. The ready market volumes stood at 177.169 billion shares, as compared with the turnover of 178.021 billion shares in the previous session.

Shumaila Badar, head of research at Ismail Iqbal Securities, said market recovered losses later in the day ahead of the MSCI announcement expected late in the night.

“United Bank and Lucky Cement, the two stocks that are in danger of being downgraded tonight, emerged as two of the top contributors to the index's gains.”

Honda Car declined again after posting disappointing results the other day. “MSCI announcement may affect the market on today (Wednesday). If all goes well then the index may react positively,” she added.

Government silence on meeting with Chinese officials about the package and additional export facility, as well as reports that the IMF would likely ask Pakistan to increase power and gas rates kept the index in the red zone.

Increased energy and power rates would further fuel inflation rate, but the government before signing any fresh loan agreement with the IMF has to pass through tougher conditions which also include reducing twin deficits.

Analysts said the market did turn positive later in the day amid some positive news that the government has assured textile manufacturers of receiving subsidy on gas. Textile exporters and the other four export-oriented industries would get gas on subsidised rate to boost exports, which would help the country clip its trade deficit, said an analyst.

The highest gainers were Island Textile, up Rs56.00 to close at Rs1,771.00/share, and Pakistan Tobacco, up Rs49.80 to finish at Rs2,344.74/share.

Companies that booked highest losses were Jubilee Life Insurance, down Rs30.90 to close at Rs588.10/ share, and Khyber Tobacco, down Rs23.06 to close at Rs465.65/share.

Lotte Chemical recorded the highest volumes with a turnover of 21.845 million shares. The scrip gained Re1 to close at Rs19.10/share.

The lowest volumes were witnessed in Fauji Foods Limited, recording a turnover of 5.685 million shares, and losing Rs0.14 to end at Rs34.01/share.