Stocks end flat as investors cautious on trade tussle

The capital market ended flat on Wednesday following range bound trade, as investors waited for the tussle between the government and traders on taxation and CNIC issue to end amicably, dealers said.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Pressure remained at the Pakistan Stock Exchange (PSX) on concerns over political and economic uncertainty.”

Oil and banking stocks outperformed on higher global crude oil prices and strong financials for banking sector.

Consolidation post major quarterly earnings announcements at PSX, concerns over likely subdued economic growth in FY20, and uncertainty over impact of Financial Action Task Force review due next year played a catalytic role in the bearish close, Mehanti added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.11 percent or 36.10 points to close at 33,761.41 points level. KSE-30 shares index followed suit with a low of 0.27 percent or 42.80 points to end at 15,752.45 points level.

Of 345 active scrips, 142 went up, 178 retreated, and 25 remained unchanged. The ready market volumes stood at 129.961 million shares, as compared with the turnover of 225.084 million shares in the previous session.

Salman Ahmad, head of institutional sales at Aba Ali Habib said that investors have adopted a cautious approach because of political uncertainty. But, he said fundamentals were strong as the market has received continuous support from financial institutions.

“Also, if the political uncertainty subsided soon the market has enough room to stage a good recovery,” he added.

Equities mostly moved in a narrow band throughout the session with an index of 33,951 points

and low of 33,670 points as investors sold their positions on available profits, while few asserted the declines and picked shares on a hope of good return in the near future.

According to an analyst, several sectors showed mixed performance because of the financial results announced especially in the cement, oil, automobile and steel sectors, where several showed losses against profit recorded in the same period last year. Announcements from some companies showed strength against the weakening economy because of higher sales.

The analyst said banks were in the buying chart because of the announcement of higher earnings due to increase in net interest margin, since most of the banks

parked their funds in government backed securities like Pakistan Investment Bonds and Treasury Bills, offering more than 13 percent annual return.

Auto and cement sectors have been showing dismal performance for a long time because of the increase in auto prices owing to depreciation that has reduced buying, and government’s slow release of funds for development projects.

The highest gainers were Pakistan Tobacco, up Rs113.20 close at Rs2,400.20/share, and Service Industries Limited, up Rs85.23 to finish at Rs1,800.00/share.

Companies that booked highest losses were Nestle Pakistan, down Rs147.00 to close at Rs6,645.00/share, and Island Textile, down Rs101.65 to close at Rs1,931.35/share.

WorldCall Telecom recorded the highest volumes with a turnover of 13.341 billion shares. The scrip lost Re0.02 end at Rs1.20/share.

The lowest volumes were witnessed in The Searle Company, recording a turnover of 3.225 million shares, whereas the scrip gained Rs7.13 to end at Rs173.70/share.