Stocks fall on profit-booking amid muffled results

Stocks suffered losses on Wednesday as investors booked profits in cements and steels, while muffled financial results and monetary policy status quo by central bank citing high inflation sent waves of concerns across the apex bourse, dealers said.

Pakistan Stock Exchange’s (PSX) KSE-100 shares index lost 0.95 percent or 400.49 points to close at 41,898.70 points, while KSE-30 shares index followed suit with a low of 1.01 percent or 198.45 points to end at 19,393.01 points.

Ahsan Mehanti from Arif Habib Corporations said “Stocks took a battering in the wake of SBP (State Bank of Pakistan’s) monetary policy status quo, which it said was maintained mostly owing to a higher CPI (consumer price index) inflation”.

“Institutional interest in selected oversold scrips in textile sector following SBP’s unveiling a 200 billion export financing package under its schemes, and oil sector, supported the index to close above session lows in the pre-privatisation rally.”

Weak global crude oil prices and investor fears over impact of likely ECC approvals on a 15 percent gas tariff hike led to a bearish close, Mehanti added. Of 353 active scrips, 106 were up, 236 retreated, and 11 remained unchanged. Volumes improved to 197.137 million shares, compared to 189.002 million in the previous session.

Sateesh Balani, director research at Islmail Iqbal Securities, said, “The KSE-100 index remained under pressure throughout the session where volumes increased compared with Tuesday's session”.

Furthermore OGDC (Oil and Gas Development Company) closed with a gain of 0.61 percent on media reports that Pakistan was likely to offer Malaysia a possible seven percent stake in the company, Balani added.

Faisal Shaji, Strategist at Standard Capital, said “Even though sentiment is not that bad given impending 'positives' in economy but still the market has been negative for many sessions now”. “The main reason has been the results of the manufacturing sector, which seem ‘depressed’ given impact of overall slowdown as the aftermath of IMF (International Monetary Fund) programme.”

However, he said the implementation of new broker regime was ‘hurting the market sentiment at the moment. “Also status quo in policy rate is also not helping,” Shaji added.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “The market continues to remain muted on lack of any encouraging developments, while interest rate status quo was broadly expected by all the players of the market”. “Some of the financial numbers filtering in have been against the expectations, while cement and steel shares have been under selling pressure as the slower pace of the economy hurt their sales and profit numbers,” Ahmed added.

Arif Habib Limited in a roundup said, “The market went down by another 508 points and closed the session at this level (unadjusted)”.

Furthermore the SBP’s decision of not cutting the rates at this stage caused concern amongst investors and resulted in booking of profits in cement, steel sectors, the brokerage added.

Top gainers were Indus Dyeing, up Rs26.23 close at Rs503.23/share, and Service Industries Limited, up Rs22.23 to finish at Rs902.23/share.

Top losers were Siemens Pakistan, down Rs35.97 to close at Rs618.03/share, and Archroma Pakistan, down Rs34.92 to close at Rs600.08/share.

WorldCall Telecom recorded the highest volumes with a turnover of 22.725 million shares; however, it lost Rs0.07 to end at Rs1.09/share.

Avanceon Limited’s turnover was the lowest of the day with 4.825 million shares, whereas the it shed Rs1.46 to end at Rs38.35/share.