Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!
September 24, 2019

Stocks off to a bad start as sentiment sags on inflationary scares


September 24, 2019

Stocks on Monday got off to a bad start in an unsteady session on profit-taking as sentiment sagged after central bank hinted inflation is unlikely to cool off anytime soon, slimming the chances of monetary softening down the line, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index lost 1.12 percent or 359.89 points to close at 31,751.21 points, while KSE-30 index took a hit of 1.22 percent or 183.67 points to end at 14,919.33 points. Of 345 active scrips, 95 closed higher, 227 lower, and 23 ended unchanged. The trading volume dropped 44 percent to 86.617 million shares, compared to 153.277 million in the previous session.

Analyst Ahsan Mehanti from Arif Habib Corporation said, “Stocks remained under pressure on concerns over economic uncertainty amid dismal exports numbers in August 2019, falling 7.6 percent to $1.86 billion from $2.013 billion in the same month last year”. Banking stocks outperformed on upbeat data on current account deficit in Jul-Aug period of this fiscal year reduced by 54 percent to $1.292 billion and International Monetary Fund (IMF) affirmation on the country’s economic stability.

“Weak FDI (foreign direct investment) data, slump in cement and auto sales in August, downtrending global equities, and worries over reemerging political noise weighed down on the stocks”, Mehanti added.

Madiha Javed, head of research at Ismail Iqbal Securities, said, “The benchmark index remained volatile throughout the session today and investors chose to cover their positions and opted for profit-taking due to rollover week”. Exploration and production companies, commercial banks, and cements cumulatively shaved 251 points off the index, Javed added.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said,” The market last week scored more than 650 points, triggering profit selling”.

Moreover, the index moved down because of commencement of the rollover week during which investors, both general and institutional, usually sell their open positions, clipping the index, Ahmad added.

He said any supporting news from Prime Minister Imran Khan’s US visit, especially regarding Kashmir issue or any assurance of financial assistance from Washington would be cheered by the investors.

A leading analyst said the market was down because of the State Bank of Pakistan Deputy Governor Jameel Ahmed’s statement before the National Assembly Standing Committee on Finance that inflation would remain high for two more years. This revealed that interest rate might take time to come down, he said.

Saad Hashmey, executive director at BMA Capital Management, said, “After a week-long consolidation, the KSE-100 index corrected by 1 percent, clearly looking for a positive trigger”.

Only index heavyweight PSO traded with a healthy volume of 5.2 million shares in the hope of sukuk issuance to reduce circular debt,” Hashmey said.

The highest gainers were Rafhan Maize, up Rs100 close at Rs5,800/share, and Gatron Industries, up Rs22 to finish at Rs480/share.

Companies that booked highest losses were Colgate Palmolive, down Rs107 to close at Rs2,037/share, and Bhanero Textile, down Rs40.56 to close at Rs810/share.

Maple Leaf Cement recorded the highest volumes with a turnover of 6.394 million shares, losing Rs1 to end at Rs14.74/share, while DGK Cement ended with the lowest turnover of 2.907 million shares, shedding Rs2.27 to end at Rs44.85/share.