Stocks fall after mixed earnings

Stocks fell on Wednesday after a handful of mixed earnings reports dragged down the benchmark index and also curbed investor enthusiasm, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.07 percent or 29.90 points to close at 40,154.11 points level. KSE-30 shares index followed suit with a high of 0.12 percent or 20.90 points to end at 17,422.77 points level.

Of 400 active scrips, 157 up, 223 retreated, and 20 remained unchanged. The ready market volumes stood at 427.204 million shares, as compared with the turnover of 458.803 million shares in the previous session.

Dealers said adjustments and profit selling was the name of the game at the market as some of the financial announcements of the company came below expectation owing to impact of COVID-19.

Brokerage Topline Securities said “the session was dominated by prevailing financial results season”.

ENGRO gained 2 percent post announcement of its result as the company declared dividend of Rs8/share.

While Pak Suzuki closed 4.42 percent lower as the company posted loss per share of Rs29.92 in the first half of 2020.

“Furthermore, the investor’s attention continued in Sui companies as stocks of SSGC and SNGP gained 5 percent and 2percent, respectively as the government has to initiate work on new pipeline projects after the Supreme Court verdict on GIDC decision,” Topline Securities said in its post market note.

Analyst Ahsan Mehanti of Arif Habib Corporations said stocks closed lower amid pressure in cement, autos and banking scrips post major earnings announcements at PSX and concerns over rupee instability, and uncertain political outlook.

“GIDC levies on industrials, reduction in profit margins of IPPs, negative growth in private sector credit, shrinking LSM during Jul’20 played a catalytic role for negative close,” Mehanti added.

Shahab Farooq, director research at Next Capital said the market remained volatile throughout the day where it opened on a positive note but closed the day marginally negative.

“Profit taking was seen across various sectors including banks, cements and fertilizers,” Farooq said.

Zia Shafi, investment advisor at Inter-market Securities said the market has been downward correction phase as number of investors has been indulged to book profits.

“Moreover, some of the financial results also dampened investors mood and in near term one should not take any long positions as market would see some more slides,” Shafi added.

The top gainers were Bhanero Textile, gaining Rs69.37 to close at Rs994.37/share, and Bata Pakistan, up Rs22.00 to finish at Rs1,600.00/share, while Unilever Foods, down Rs100.00 to close at Rs9,600.00/share, and Sapphire Fibre, losing Rs65.00 to close at Rs805.00/share, were the main losers.

Pakistan International Bulk posted the highest volumes with 26.242 million shares, but lost Rs0.15 to end at Rs12.36/share whereas D.G.K. Cement turnover was the lowest with 12.049 million shares, whereas the scrip lost Rs1.85 to end at Rs12.36/share.