Stocks fall as energy sector tracks crude oil; inflation weighs

Stocks on Tuesday were weighed down by concerns over higher inflation numbers, slipping international crude oil’s toll on local energy sector, amid continuous institutional and foreign selling in the rollover week, dealers said.

KSE-100 shares index at Pakistan Stock Exchange (PSX) lost 0.56 percent or 240.04 points to close at 42,299.19 points, while KSE-30 shares index followed suit with a low of 0.74 percent or 146.42 points to end at 19,591.46 points level.

Analyst Ahsan Mehanti from Arif Habib Corporations said the stocks closed lower amid pressure on uncertainty over SBP (State Bank of Pakistan) policy announcement”.

“Institutional support remained in selected oversold cement, auto and banking scrips on speculations ahead of major financial results due this week.” Slump in global crude oil prices, uncertainty in global equities on growth fears following coronavirus outbreak in China bore down on the index, Mehanti added.

Of 356 active scrips, 130 gained, 206 lost, and 20 were unchanged. The ready market volumes retreated to 189.002 million shares from 198.479 million in the previous session.

Samiullah Tariq, director research at Arif Habib said, “The market went down on concerns of high inflation numbers that are likely to go further up owing to a rise in the prices of food stuff and tariffs of utilities”.

“Another factor which clipped gains was the continuous decline in crude oil prices, which is going down following coronavirus eruption in the world’s second biggest economy.”

It was largely expected that the virus would lead to some slowdown in the economies, trimming the crude oil prices, impacting local listed oil and exploration companies, Tariq added.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said “The market was mixed to down because of three factors namely, rollover week, decline in crude oil prices, and monetary policy announcement”.

The rollover week has started with the market in an overbought zone. Moreover, Ahmad said continuous fall in crude oil, estimates down by $10/barrel in the last over a week and status quo maintained by the central bank also weighed.

“If some downward movement has been forecasted the cement and steel shares would be showing a different picture,” Ahmad added. Arif Habib Limited in their daily market analysis stated, “Cement sector continued performing well, whereas oil and gas chain remained under pressure due to decline in international crude oil prices”.

Global stock markets have roiled due to the outbreak of NCV (new coronavirus) in China that also affected commodity markets, the brokerage house added. The highest gainers were ICI Pakistan, up Rs37.66 close at Rs722.48/share, and Indus Motor Company, up Rs25.62 to finish at Rs1072.47/share.

Companies that booked highest losses were Pakistan Tobacco, down Rs36 to close at Rs1,999/share, and Bata Pakistan, down Rs31.17 to close at Rs1,918/share.

Maple Leaf recorded the highest volumes with a turnover of 29.705 million shares, whereas the scrip gained Rs0.16 to end at Rs24.99/share.

The lowest volumes were witnessed in Bank of Punjab, recording a turnover of 4.991 million shares, while it lost Rs0.19 to end at Rs13.46/share.