Stocks slip as crude oil slump takes toll on E&Ps

Stocks on Friday extended losses for the seventh consecutive session led by energy stocks which were sucked down by the sinking international crude oil market, amid disappointing corporate results, dealers said.

Ahsan Mehanti from Arif Habib Corporations said, “Stocks closed lower amid higher trades on global equity selloff and concerns over Moody’s statement that Pakistan’s persistence on FATF’s (Financial Action Task Force) grey list was credit negative for the country’s banks”.

Oil stocks took a big battering on falling global crude oil prices, while support was witnessed in textile stocks on surging exports, Mehanti added.

“Dismal earnings announced by cement, banks, oil exploration sector amid reports over a likely holdup in the privatisation of SOEs (state-owned enterprises) weighed on the index,” he said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index lost 0.27 percent or

103.70 points to close at 37,983.62 points, while KSE-30 followed suit with a low of 0.58 percent or 101.61 points to end at 17,477.60 points.

Of 358 active scrips, 173 gained, 161 lost, and 24 were unchanged. The ready market volumes reached 202.177 million shares, as compared to 249.243 million shares in the previous session.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said today (Friday) the market after a long time saw some green pastures and the index recorded some gains.

“Global crude oil prices, recording continuous decline for three sessions in row, made heavy dents in the index-heavy local oil and exploration stocks, leading to sharp erosion in the overall trend of the market,” Ahmad said.

He added that slowly the fear of corona virus would fizzle out and the index in the coming week might show some signs of sanity. A leading trader said tally of losses was lower compared to preceding sessions and the index for a short time landed in the positive zone, following active participation of financial institutions.

“The market in the coming week is likely to perform well depending upon the inflation rate, to be announced on Monday and Tuesday, amid a likelihood of its being somewhat lower than the January number of 14.67 percent,” the trader said.

Moreover, he added that the government was expected to trim petroleum products’ prices to tame inflation, which would help cut cost of doing business and boost competitiveness.

The central bank data showed that foreign portfolio investment at stock market stood at $21.5 million in July-January FY20. The equity market saw outflows of $408.9 million last year.

The highest gainers were Bhanero Textile, up Rs45.99 close at Rs999.99/share, and Indus Motor Company, which gained Rs41.97 to finish at Rs985.00/share. Companies that booked highest losses were Rafhan Maize, down Rs188.09 to close at Rs6811/

share, and Phillip Morris Pakistan that lost Rs150.85 close at Rs2,338/ share.

Hascol Petrol recorded the highest volumes with 18.530 million shares, but lost Rs0.53 to end at Rs18.83/share, while Fauji Foods Limited’s turnover was lowest with 5.268 million traded shares and ended at Rs10.21/share after shedding Rs0.13.