PSX losses deepen in tandem with global markets; virus fears weigh

Stocks on Wednesday continued to pile up losses in tandem with coronavirus-panic-hit global markets amid unabated crude oil slide, fueling both local and foreign selling, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index lost 1.34 percent or 520.12 points to close at 38,338.33 points, whereas KSE-30 hit a low of 1.29 percent or 230.76 points to end at 17,647.62 points.

Faizan Munshey, head of foreign sales at Next Capital Limited, said the stocks continued to fall … taking inspiration from the world equity markets as investors continued to fret over increasing coronavirus cases globally.

“Global trade imbalances are definite. Supply chain disruptions across the world have started to occur. If coronavirus crisis persists and expands then global growth is at risk of slowing down drastically and world central banks will have to intervene,” Munshey added.

Of 348 active scrips, 80 were up, 251 down, and 17 ended neutral. The ready market volumes stood at 147.943 million shares, compared to 124.348 million shares in the previous session.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said investors were worried about coronavirus outbreak’s implications as China supplied around 70 percent of the global raw material. “Decline in exports and imports from China will likely hit the economies in the region as well as Pakistan badly.”

Ahmed added that stocks suffered heavy battering because of deep economic crisis in China, until there was any clarity how things would be handled.

“The market is likely to remain depressed or on the losing ground,” he said. Analyst Ahsan Mehanti from Arif Habib Corporations said, “Bearish trend persisted at the PSX amid foreign outflows, dismal data on trade deficit for January 2020 and concerns over reports of delay in privatisation of SOEs (state-owned enterprises) on global equity selloff”.

Slump in global equities, uncertainty over outcome of FATF (Financial Action Task Force) decision and falling global crude oil prices weighed on the index, Mehanti added.

A leading trader said the global rout impacted the domestic market where the US stocks suffered a decline of $1.7 trillion in two sessions and went down $2.1 trillion in a week, sending grave signals. “Moreover, the spreading of coronavirus has so far had far-reaching effects and has dampened the economic activity across the globe especially the Asia-Pacific region,” the trader added.

He further said there had been continuous foreign outflow from the domestic market, while the individuals were following the global trend, which created cracks in the local price pattern.

Rafhan Maize, up Rs188.88 to close at Rs6,999.88/share, and Wyeth Pakistan Limited, up Rs52.95 to finish at Rs867.70/share, were the major gainers of the day.

Pakistan Tobacco, down Rs116.34 to close at Rs1673.52/share, and Bata Pakistan, down Rs39.99 to close at Rs1,760/share emerged as the top losers.

Unity Foods Limited led the volumes with 29.780 million traded traded shares, but lost Rs0.1 to end at Rs13.45/share, whereas Pakistan International Bulk’s turnover was lowest with 3.044 million shares and it lost Rs0.23 to end at Rs10.29/share.