Stocks end flat as risk-shy investors grope for direction

Stocks on Friday ended flat as risk-shy investors remained on the lookout for strong triggers in an uncertain macroeconomic environment, where local currency is in a free fall and growth outlook is growing dimmer, dealers said.

Topline Securities in a report said investors’ sentiments remained under pressure owing to slow growth of economy and weak indicators. “Further hike in policy rate also encouraged investors to make their way from equities towards fixed income securities like National Saving Certificates and other government securities which are offering double digit risk free returns,” the brokerage said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index gained 0.02 percent or 5.69 points to close at 37,521.81 points, whereas KSE-30 lost 0.01 percent or 1.82 points to end at 17,734.58 points.

Of 319 active scrips, 155 moved up, 148 retreated, and 16 remained unchanged. The ready market volumes stood at 101.739 million shares, as compared to a turnover of 127.962 million the previous session.

Analyst Ahsan Mehanti from Arif Habib Corporation said stocks were flat in the post earning season at the apex bourse led by selected scrips across the board on institutional interest on finance minister’s affirmations for rupee stability, encouraging investment in stocks and hints over budgetary support projecting capital markets to new highs.

“Higher urea prices, rising global crude oil prices, hopes over positive outcome of IMF (International Monetary Fund) reforms for a bailout package catalysed a positive close,” Mehanti added.

Salman Ahmad, head of institutional sales at Aba Ali Habib said market after long depression closed on a positive note owing the Finance Minister Asad Umar’s speech through video conferencing at the stock market saying that rupee has reached its equilibrium and now there is no room for further depreciation.

“The market men were in need of clarity from the government or the finance minister about rollercoaster ride of dollar, with no more room for depreciation the market despite having low turnover closed green after falling by more 250 points during the session," Ahmad said.

According to an analyst on technical grounds the market is showing resistance below 38,000 level and with the promise of effective measures to be adopted in the next federal budget for the stock market the investors might build some fresh positions next week.

The market is likely to show some recovery as the index, since the arrival of the new government, has lost more 4000 points, giving room for fresh buying, the analyst predicted. He however added that but buying could only kick in if the investors receive any positive news from the economic front like signing of agreement with the IMF, fresh inflows from the foreign investors, or a boost in agriculture and manufacturing sectors.

The highest gainers were Nestle Pakistan up Rs230.05 to close at Rs7294.40/share, and Island Textile, up Rs82.00 to finish at Rs1849.00/share.

Companies that booked highest losses were Wyeth Pakistan Limited, down Rs14.96 to close at Rs922.37/share, and Murree Brewery, down Rs13.00 to close at Rs782.00/share. Interloop Limit recorded the highest volumes with a turnover of 14.321 billion shares. The scrip gained Rs0.05 to close at Rs46.15/share.

The lowest volumes were witnessed in Unity Foods recording a turnover of 13.744 billion shares, whereas the scrip shed Rs0.15 to end at Rs3.76/share.