Stocks struggle amid economic angst, Kashmir tensions

Stocks fell over one and a half percent on Friday as escalating tensions in Kashmir and anxieties over economic slowdown left investors struggling to take fresh positions in an oversold market, dealers said.

They said selling pressure erupted at energy counters on reports of more disinvestment by government in Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL).

“Pricing of both entities would be derived from the average six months price, which appeared to be on the lower side, fetching less price,” said analyst Salman Ahmad at Aba Ali Habib. “and that hit market sentiment.”

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 1.61 percent or 486.84 points to close at 29,672.12 points level.

KSE-30 shares index followed suit with a low of 2.24 percent or 319.70 points to end at 13,931.69 points level.

Of 322 active scrips, 77 up, 231 retreated, and 14 remained unchanged.

The ready market volumes stood at 109.964 million shares, as compared with the turnover of

118.586 million shares in the previous session.

Analyst Ahsan Mehanti at Arif Habib Corporations said panic selling continued amid higher trades in future rollover week ‘on investor concerns over resolve for Kashmir tensions”.

He said S&P affirmations on Pakistan ratings at B-/B and Asian Development Bank approval on $7.5 billion assistance invited midsession support.

“Uncertainty over outcome of FATF evaluations and concerns over higher fiscal imbalance played a catalytic role in bearish close,” Mehanti added.

Another analyst said continuous decline in share prices has dried out liquidity of the market players.

“Despite attractive levels and some of the key economic indicators showing some signs of improvement like stable foreign exchange reserves, growth in exports, decline in imports and narrowing of current account deficit and strengthening of rupee, the market has been unable to recover fast despite attractive levels,” the analyst said.

Traders feared more selling pressure in near-term as the market had again slipped below 30,000 points level.

Moreover fertiliser sector that came out as winner due to resolution of GIDC issue, also came under fire with significant declines in prices from previous day’s close.

The highest gainers were Nestle Pakistan, up Rs290.00 to close at Rs6090.00/share, and Pakistan Tobacco Rs114.99 to finish at Rs2415.00/share.

Companies that booked highest losses were Sanofi-Aventis, down Rs26.12 to close at Rs496.38/share, and Siemens Pakistan down Rs24.98 to close at Rs585.01/share.

K-Electric Limited recorded the highest volumes with a turnover of 10.088 billion shares.

Whereas the scrip lost Rs0.17 to end at Rs3.05/share.

The lowest volumes were witnessed in International Steels Limited recording a turnover of 3.246 million shares, whereas the scrip lost Rs1.27 to end at Rs37.83/share.