Stocks extend losses as investors continue to claim profits

Stocks of Friday remained on the ropes for the third straight day, losing over a percent as investors continued to claim profits in a overbought market amid economic uncertainties, seen lingering until a loan deal is reached with the lender of the last resort, dealers said.

Salman Ahmad, director institutional sales at Aba Ali Habib said the selling was mostly because of technical factors as the market failed to resist the slide as a level above 41,000 points appeared to be heavy.

“Furthermore the downgrading from the S&P (Standard & Poor’s) shocked some of the investors, who now reckon that a respite for Pakistan will arrive only after it enters a loan deal with the IMF (International Monetary Fund),” Ahmad added. Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index lost 1.08 percent or 445.40 points to close at 40,887.35 points, while KSE-30 shares index was down 1.26 percent by losing 249.32 points to end at 19,598.60 points.

Of 336 active scrips, 81 moved up, 233 retreated, and 22 remained unchanged. The ready market volumes stood at 169.100 million shares, as compared to a turnover of 137.668 million shares in the previous session.

Analyst Ahsan Mehanti from Arif Habib Corporation said bearish activity was witnessed at the PSX amid pressure as investors weighed dismal financial results in bank and cement stocks and the impact of S&P downgrade of sovereign credit rating earlier this week.

“Weak cement sales data for January 2019, falling global crude oil prices, and concerns over pending circular debt in the energy sector contributed to a negative close,” Mehanti added. Moreover, analysts say, some positive vibes are expected to arrive as the Prime Minister Imran Khan would be on a day’s visit to Dubai for World Summit on the sidelines of which Khan was likely to meet the crown prince, who might assure some incentives or a package for Pakistan.

An analyst said the market recorded declines in tandem with the global rout. Asian markets were mostly down, while European market also opened negative on concerns over economic growth and trade disputes that pushed global stocks toward their first weekly loss since December. Auto sector, another analyst said, lost in the range of Rs1 to Rs4.78 on fears the earnings of the automobile companies would be lower compared to last year as the sales were quite dismal. “The market took a small jolt over the development that rupee has shed some weight against dollar, which forced the foreign investors to take a step back as it is being feared that before any finalisation of loan package [with IMF], the local currency might depreciate further,” the analyst added.

Arif Habib Limited in a report said stocks that contributed positively included FFC (+20pts), PIBTL (+6pts), SCBPL (+3pts), AICL (+2pts), and DGKC (+2pts), while those that dragged the index down included HBL (-47pts), HUBC (-33pts), OGDC (-31pts), ENGRO (-28pts), and POL (-26pts).

The highest gainers were Siemens Pakistan, up Rs13.00 to close at Rs792.00/share, and Sunrays Textile, up Rs10.92 to finish at Rs229.42/share.

Companies that booked highest losses were Colgate Palmolive, down Rs100.00 to close at Rs1900.00/share, and Wyeth Pakistan Limited, down Rs43.00 to close at Rs1105.00/share. Pakistan International Bulk recorded the highest volumes with a turnover of 13.414 billion shares, gaining Rs0.29 to close at Rs12.61/share.

The lowest volumes were witnessed in K-Electric Limited, recording a turnover of 23.238 billion shares, whereas the scrip lost Rs0.11 to end at Rs6.38/share.