Stocks lose as dismal outlook locks investors out of trade

Stocks on Monday lost over a percent with traded volume hitting a 14-month low as a dreary economic outlook locked most of the investors out of the market, which was also seen tracking a worldwide rout that raised the fears of global recession, dealers said.

Analyst Ahsan Mehanti from Arif Habib Corporation said stocks closed bearish amid thin trade in futures rollover week and pressure on concerns over falling rupee and likely hike in gas prices.

“Dismal growth projection numbers at 3.5-4 percent of GDP, deteriorating fiscal deficit in FY19, weak global equities, and uncertainty over the outcome of IMF talks for bailout package led to a negative close,” Mehanti added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 1.05 percent or 403.21 points to close at 38,128.66 points level. KSE-30 shares index followed suit with a low of 1.09 percent or 198.22 points to end at 18,040.46 points level.

Of 322 active scrips, 61 moved up, 241 retreated, and 20 remained unchanged.

Investor participation or traded volume slumped to its 14-month low to 56.5 million shares, compared to 84.640 million shares in the previous session.

Topline Securities in its market review said the decline could be attributed to the effect of global markets where negative factors like unsatisfactory manufacturing data from Germany, announcement by US Federal Reserve to not raise interest rates this year, pushed global markets down.

“Exploration and production sector dragged the index down most, chipping away 98 points from the index. Similarly, cements and fertiliser cumulatively claimed 126 points,” the brokerage said.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said the low volume and rollover week disturbed the sentiment of the market participants.

“Moreover, some key developments such as arrival of FATF team, IMF representatives and upcoming announcement of monetary policy, kept most of the investors cautious,” Salman added.

Madiha Javed, head of research at Ismail Iqbal Securities, said the market remained negative throughout the session today with overall volumes touching a new 10-month low. “News of receipt of $2.1 billion from China failed to drive positive sentiments in market. The monetary policy announcement, exchange rate fluctuation, and IMF program holdup kept the market under pressure,” Madiha added.

An analyst said continuous battering of rupee at the open market weighed on the market significantly. “Noise of further devaluation has forced the foreign investors to stay away from the market,” the analyst added.

The market opened to go under pressure and later almost breached the 38,000 level, hitting a session low of 38053 points; however later hours support helped it inch up. The trend overall was quite negative, hinting with no triggers in sight it was likely to see more downward correction.

The highest gainers were Phillip Morris Pakistan, up Rs157.27 to close at Rs3924.08/share, and Sanofi-Aventis, up Rs25.00 to finish at Rs825.00/share.

Companies that booked highest losses were Nestle Pakistan down Rs389.45 to close at Rs7399.60 share, and Wyeth Pakistan Limited down Rs46.63 to close at Rs965.87/share.

Power Cement recorded the highest volumes with a turnover of 2.048 million shares. The scrip gained Rs0.23 to close at Rs7.91/share.

The lowest volumes were witnessed in K-Electric Limited recording a turnover of 5.504 million shares, whereas the scrip lost Rs0.25 to end at Rs5.39/share.