PSX ends lower on weakness in energy stocks

Stocks grappled with losses on Tuesday as a drop of over two percent in global oil prices on concerns about the spread of coronavirus and its impact on demand pulled down energy shares, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index lost 0.73 percent or 285.28 points to close at 38,858.45 points, while KSE-30 hit a low of 0.97 percent or 173.18 points to end at 17,878.38 points.

Analyst Ahsan Mehanti from Arif Habib Corporations said stocks closed lower amid bearish trend in global equities and slump in global crude oil prices.

Auto, textiles and cement stocks outperformed on surging exports and speculations on a likely fall in local energy prices amid China virus outbreak, he said. “Furthermore, investor concerns over foreign outflows and economic uncertainty weighed on the stocks,” Mehanti added.

Of 336 active scrips, 159 were up, 162 went down, and 15 ended unchanged. The ready market volumes stood at 94.475million shares, as compared with the turnover of 144.282 million shares in the previous session.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said the investors avoided any adventures on concerns arising from a coronavirus panic-led global equity meltdown, which also affected commodities and was seen slowing down the world economy.

“The overall stance has been cautious as several rumors related to coronavirus continued to hurt an already bruised market; however the market is most likely to track the global bourses…,” Ahmed added.

A leading analyst said “The index lost mainly because of the correction in oil and exploration sector following a decline of up to 2 percent in global crude oil prices”.

On Monday at one stage crude oil prices fell by more than 4 percent; however late recovery in US stock market helped some of the commodities including crude to make a small rebound, the analyst said.

“It impacted local oil and exploration sector with OGDC (Oil and Gas Development Company) share price falling by Rs 2.16 and PPL (Pakistan Petroleum) by Rs3.53 per share, forcing the market to close in the negative zone,” the analyst said.

A trader said another factor that badly dented the overall sentiment came from International Monetary Fund, as the government had been unable to convince the lender of the last resort to loosen its stance on revenue collection target and energy sector tariffs and subsidies.

The talks succumbed to inefficiencies on part of Federal Board of Revenue as it failed to increase revenue collection using old school methods and losses in the energy sector also impacted the overall structure, the same trader said.

Top gainers were Sapphire Textile, up Rs51.95 close at Rs939.90/share, and Sapphire Fibre, up Rs48.93 to finish at Rs801.89/share.

Rafhan Maize, down Rs189 to close at Rs6,811/share, and Pakistan Tobacco down Rs124.42 close at Rs1789.86/share, were the major losers of the day.

Unilever Foods volume was highest with 10.025 million shares with the scrip gaining Rs0.28 end at Rs13.55/share, whereas OGDC’s was the lowest with a turnover of 2.958 million shares and it lost Rs2.46 to end at Rs124.70/share.