close
Advertisement
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!
January 16, 2020

Stocks fall as sentiment slips through ruling coalition cracks

Business

January 16, 2020

Stocks on Wednesday were out of the flats and into a fall on profit-taking as cracks in the ruling coalition seems to have widened, giving rise to political uncertainties and forcing investors to be safe than sorry, dealers said.

Pakistan Stock Exchange’s (PSX) KSE-100 shares index lost 0.50 percent or 214.02 points to close at 42,993.02 points with KSE-30 following the suit with a loss of 0.49 percent or 98.45 points to end at 19,931.61 points.

Analyst Ahsan Mehanti from Arif Habib Corporation said, “Pressure remained in selected scrips across the board amid a slump in crude oil prices and wobbly global equities”.

“Political uncertainty, investor concerns over falling local cement prices, weak auto sales, and surging circular debt crisis took their toll on the index,” Mehanti added.

As many as 364 scrips were active today of which 120 moved up, 224 retreated, and 20 remained unchanged. Trading volume sagged to 171.256 million shares, compared to 249.669 million on Tuesday.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said “The market was witnessing lower volumes and moving sideways because it lacked any big economic developments”.

“There has also been some selling pressure as financial institutions are mostly dormant following massive buying in recent weeks.”

Political front was again in the limelight because one of the parties had decided to part ways with the ruling coalition, creating some nervousness amongst investors.

Samiullah Tariq, director research at Arif Habib Limited, said, “The market, since the beginning of the week, has been moving southwards due to some political uneasiness after the surfacing of differences between the allied parties of the government”.

“The market is under some selling pressure in the wake of a rise in utility prices, seen pushing inflation higher and eventually delaying an interest rate cut, earlier expected in the second month of this calendar year”. “Now all depends on the inflation numbers,” Tariq added.

Bears were in control, mostly owing to concerns over rising inflation rate and subdued export performance that had been raising alarm bells for the investors, he said.

Recently, speaking at a seminar, Governor State Bank of Pakistan Dr Reza Baqir highlighted the issue of export competitiveness and growth. Baqir elaborated that the countries in the region had witnessed growth because of steady rise in exports, wherein Pakistan lacked.

“Slower exports have trimmed the margins of several textiles, which are listed at the stock market,” SBP governor said.

Arif Habib Limited in a note said, “Political uncertainty took control over sentiment today”. “Allies of PTI (Pakistan Tehreek-e-Insaf) are one by one showing disapproval of their policies and hinting a crisis ‘in the making’ that caused investors to be safe than sorry.”

The brokerage added that investors kept booking profit at current levels, which exerted pressure on oil and gas chain.

Today’s top gainers were Phillip Morris Pakistan, up Rs83.54 close at Rs2379.90/share, and Pakistan Tobacco, Rs24.99 to finish at Rs2,229/share. Major loss-makers were Bata Pakistan, down Rs69.72 to close at Rs1910.28/share, and Pakistan Services, down Rs49.50 to close at Rs940.50/share.

With a turnover of 19.650 million shares, Bank of Punjab was the volume leader, gaining Rs0.12 to end at Rs13.50/share. Fauji Foods Limited’s turnover was lowest with 4.566 million traded shares, whereas it lost Rs0.25 to end at Rs14.54/share.