Stocks shed more than 1pc on trade suspension with India

Stocks plumbed more than one percent on Friday, closing negatively for the fifth consecutive session, as suspension of trade with India and long Eidul Azha holidays forced investors to sell their holdings, clipping the overall share values, dealers said.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks closed bearish as investors weighed uncertainty over outcome of India’s move over revoking Kashmir’s special status and concerns over political uncertainty."

Mid-session support was witnessed on institutional interest in oversold banking and cement stocks amid surging banking spreads and NDC approvals on CPEX authority for implementation of CPEC projects. Suspension of trade ties with India, weak global crude oil prices and slump in global equities played a catalytic role in the bearish close, he added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 1.04 percent or 308.91 points to close at 29,429.07 points level. KSE-30 shares index followed suit with a low of 1.43 percent or 200.74 points to end at 13,793.17 points level.

Of 321 active scrips, 170 moved up, 134 retreated, and 17 remained unchanged. The ready market volumes stood at 76.410 million shares, as compared with the turnover of 109.097 billion shares in the previous session.

Salman Ahmad, head of institutional sales at Aba Ali Habib, said all the factors were unchanged like long holidays owing to Eid, temperature still high between Pakistan and India over Kashmir issue, slight fall in the foreign exchange reserves, and slide in the crude oil price, which deterred fresh investment.

The stock market in the first half of the session showed some resistance against selling pressure with the opening of the second half showing some green signs in selected sectors. But selling spree surfaced from mutual funds and other financial institutions, and some high net worth individuals trimmed the share values.

Pakistan’s equity market is now the worst performing market as it has lost more than 20 percent since January 1, 2019, while other markets in the global arena are Beirut, Zambia and Nigeria.

Investors have lost confidence in the local bourses mainly because of higher interest rate, an analyst said.

Bonds and other savings instruments have been offering risk-free return between 12 to 14 percent despite attractive PE of Pakistan Stock Exchange and higher dividend yields, but fear of more slide is discouraging investors from entering the market.

The highest gainers were Nestle Pakistan, up Rs287.00 to close at Rs6,300.00/share, and Abbott Laboratories, up Rs8.52 to finish at Rs363.00/share. Companies that booked highest losses were Mari Petroleum, down Rs19.87to close at Rs852.17/share, and Khyber Textile, down Rs19.54 to close at Rs371.43/share.

Maple Leaf recorded the highest volumes with a turnover of 7.762 million shares. The scrip gained Rs0.8 to end at Rs18.04/share.

The lowest volumes were witnessed in Agritech Limited, recording a turnover of 2.239 million shares, whereas the scrip gained Rs0.32 to end at Rs2.22/share.