Stocks end little changed as trigger-drought invites selling

Stocks on Wednesday ended hardly changed as profit-taking took no time filling the sentimental vacuum created by an absence of strong drivers, resulting in sporadic selling spurts that kept the market under pressure, dealers said.

Mohammad Arbash from Elixir Securities said going forward, they were skeptical in the near-term since the recovery from the recent low of 40,218 (Monday’s low) seems to be stalling.

“Primary supports are developing around 40,528 and 40,200 next. However, a continued drop below this area would be a sign of further bearish correction to the levels of 39,500/300 levels,” Arbash added.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index lost 0.13 percent or 52.17 points to close at 40,544.11 points level, while KSE-30 shares index shed 0.08 percent or 15.29 points to end at 19,435.91 points level.

Of 348 active scrips, 131 moved up, 198 retreated, and 19 remained unchanged. The ready market volumes stood at 160.241 million shares, as compared with the turnover of 165.074 million shares in the previous session.

Analyst Ahsan Mehanti from Arif Habib Corporations said stocks showed pressure on economic uncertainty, while institutional support was witnessed on foreign inflows, improving foreign exchange reserves, and higher global equities.

“Investor fears over likely IMF (International Monetary Fund) conditions on new taxes and increased tariffs and Moody’s negative outlook on Pakistan’s banking system led to a bearish close,” Mehanti added.

The stock market opened on a positive note and gained more than 250 points on reports that Saudi Arabia’s crown prince would sign a $20 billion worth of agreements with Pakistan including a $6 billion refinery project in Gwadar.

According to an analyst it has been positive portent for the market however investors were anxiously waiting the final outcome of the visit and its results.

“Investment and oil credit facility from Saudi Arabia would help boost sentiment of the local and foreign investors,” the same analyst said and added that the country direly needed foreign direct investment to generate economic activity and reduce unemployment.

Meanwhile cement sector responded well on expectation that quarter ended March 31, 2019 would be better because of continuous drop in coal prices, which would help improve margins. Cement shares scored in the range between Rs0.25/share to Rs4.72/share.

Analysts and economists are anxiously waiting for the government and the IMF to reach an agreement. The loan approval from the lender of the last resort would help further discipline the economy and curtail fiscal deficit and losses of the public sector companies.

The highest gainers were Rafhan Maize, up Rs100.00 to close at Rs7200.00/share, and Wyeth Pakistan Limited, up Rs15.00 to finish at Rs1065.00/share.

Companies that booked highest losses were Unilever Foods, down Rs75.00 to close at Rs7550.00/share, and Pakistan Services, down Rs52.43 to close at Rs996.32/share.

K-Electric Limited recorded the highest volumes with a turnover of 18.092 billion shares. The scrip gained Rs0.08 to close at Rs6.59/share.

The lowest volumes were witnessed in WorldCall Telecom recording a turnover of 12.984 billion shares, whereas the scrip lost Rs0.02 to end at Rs1.56/share.