Stocks draw out downslide as triggers remain a no-show

Stocks on Thursday drew out their downslide as missing market-drivers, looming monetary tightening, and a growing economic scepticism kept investors on guard, dealers said.

Topline Securities, a brokerage, said equities continue to suffer due to absence of triggers.

“Uncertainty over the IMF bailout, expectation of higher inflation in March, further hike in policy rate, local political noise, and weak sentiments dragged the market down in a range-bound choppy session,” Topline said in a report.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.42 percent or 163.04 points to close at 38,384.72 points, whereas KSE-30 followed suit with a low of 0.41 percent or 74.48 points to end at 18,118.72 points.

Of 336 active scrips, 118 moved up, 202 retreated, and 16 remained unchanged. The ready market volumes stood at 81.350 million shares compared to 83.084 million shares in the previous session.

Analyst Ahsan Mehanti from Arif Habib Corporations said the market remained under pressure on weak earnings outlook, while oil stocks outperformed after US crude oil prices surged over $60/barrel.

Mehanti said uncertainty remained over the outcome of upcoming bi-monthly monetary policy review and the fate of IMF talks for a bailout package.

“Political uncertainty and concerns over surging fiscal deficit contributed to the negative close,” he added.

Salman Ahmad, director research at Aba Ali Habib, said these developments were enough to keep investors away from the market and things would remain like this until the dust had settled on the IMF front.

Some respite might surface during the early hour of session on Friday following the arrival of Prime Minister of Malaysia Mathir Mohammad.

The visit might result into some agreements especially on oil and gas exploration and expanding business relationship, Salman said.

An analyst said the situation on economic front appeared to be murky as the government had not option but to go for a deal with the IMF.

“An agreement with the IMF would have several repercussions two of them which are thorny ones-appreciation in dollar and rise in benchmark interest rate,” the analyst said.

The dollar for the last two weeks has been creeping and from Rs138.42, closing on Thursday ended at Rs139.49 with open market rate crossing Rs140 level.

Moreover by end this month the monetary policy would be announced and analysts and economists expect the interest rate to go up by 25 to 75 basis points.

The market turned positive for a while in the morning but reverted to selling pressure, which saw selling activity in banks, cement, steel, fertiliser, autos, & OMCs.

The highest gainers were Island Textile, up Rs60.99 to close at Rs1859.99/share, and Pakistan Oxygen Limited, up Rs11.85 to finish at Rs248.86/share.

Companies that booked highest losses were Phillip Morris Pakistan down Rs188.81 to close at Rs3587.44 share, and Mari Petroleum down Rs42.76 to close at Rs1247.54/share.

Aisha Steel Mill recorded the highest volumes with a turnover of 2.267 million shares. The scrip gained Rs0.3 to close at Rs9.90/share.

The lowest volumes were witnessed in Bank of Punjab recording a turnover of 5.667 million shares, whereas the bank’s scrip lost Rs0.22 to end at Rs13.00/share.