Stocks succumb to selling pressure; E&Ps, fertilisers hit

Stocks on Friday succumbed to selling pressure in oil and gas chain, despite some improvement in international crude oil prices, amid an extended trigger-drought, while rollover effect also weighed, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index lost 0.65 percent or 272.57 points to close at 41,630.93 points, while KSE-30 shares index shed 1.03 percent or 198.69 points to end at 19,147.78 points.

Ahsan Mehanti from Arif Habib Corporations said, “Stocks closed sharply lower on global equity selloff amid fears over global growth and concerns over dismal financial results”.

Foreign outflows and investor concerns over SBP (State Bank of Pakistan) monetary policy status quo, slump in global crude oil prices and hike in local gas tariff hit the index, Mehanti added.

Of 346 active scrips, 123 were up, 211 down, and 12 closed unchanged. Volumes improved to 193.866 million shares, compared to 162.237 million in the previous session. Shahab Farooq, Director Research at Next Capital, said, “Selling pressure continued during the last day of the futures rollover week as the market undertakes the much anticipated correction of its previous gains”.

Higher inflation expectations, which might lead to prolonged status quo in the monetary policy was one of the concerns in the absence of any positive triggers, Farooq added.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “The market has been under a bearish trend for the last two weeks because of the rollover week and adjustments in the overbought situation”.

Also a trigger-drought also persists as the market had not yet received any positive development, cheering investors’ mood, Ahmad added.

“The market is likely to see range-bound activities next week as Pakistan will be presenting its case before the FATF (Financial Action Task Force) and IMF (International Monetary Fund) teams, scheduled to visit the country soon,” Ahmad said.

A leading analyst said beside rollover week, unverified reports that Shabbar Zaidi, chairman FBR may go on a medical leave, also proved negative for the market players. “They believe either the government machinery is not happy with the performance of the chairman as the target of revenue collection has not been achieved or may be a lobby is working against his appointment as chairman FBR,” the analyst said.

Arif Habib Limited in a market roundup said, “Despite slight recovery in international crude oil prices, oil & gas chain remained subdued with E&P (exploration and production) stocks declining further by approximately 2 percent on average”.

“Fertiliser companies i.e., Engro Fertilisers Limited and Fauji Fertiliser Company are said to announce a cut in urea prices by Rs150/bag and Rs300/bag respectively, which caused selling in fertiliser scrips,” the brokerage added.

Major gainers were Unilever Foods, up Rs188 to close at Rs7,788/share, and Pakistan Tobacco, up Rs101 to finish at Rs2,100/share.

Nestle Pakistan, down Rs38.98 to close at Rs7950.00/share, and Sapphire Fibre, down Rs35 to close at Rs666/share, were the major losers of the day.

Unity Foods Limited emerged as the volume leader with a turnover of 24.033 million shares, and gained Rs0.14 to end at Rs13.98/share.

Maple Leaf Cement's turnover was the lowest with 5.237 million traded shares, whereas it lost Rs0.55 to end at Rs23.71/share.