Stocks slip on late selling led by global rout

Stocks slipped on Thursday after a global rout led panic selling pared early G20 debt relief triggered gains, while weak quarterly earnings outlook and political unrest continued to dampen the sentiment, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.19 percent or 75.79 points to finish at 40,068.50 points, while volumes increased to 324.790 million shares, compared to 232.803 million shares on Wednesday.

KSE-30 shares index followed suit with a low of 0.43 percent or 72.21 points to end at 16,870.98 points level.

Ovais Ahsan, chief executive officer at Optimus Capital Management, said, "The index landed in the red zone following global markets that were hit by resurgence of novel coronavirus cases in Europe, resulting in re-imposition of lockdowns and renewed economic concerns”.

Moreover, panic selling towards the latter half of the day pared earlier gains with blue chip names i.e. MCB, HBL, and LUCK succumbing to selling pressure, Ahsan added.

Trading activity was recorded in 434 active scrips, of which 199 went up, 216 down, and 19 kept status quo.

Muhammad Saeed Khalid, head of research at Shajar Capital, said, “Stock market turned negative, after reaching a high of 40,534 points level”.

“The index performed remarkably earlier in the day after government announced omission of custom and import duties on different textile sectors and G20’s debt repayment relief for Pakistan.

Even the news regarding the depreciation of dollar in the interbank market to 5-month low failed to revive sentiments in the manufacturing industries, Khalid added.

A A Soomro, managing director at KASB Securities, said, “And the swing continues as the market moves from green to red; however, the result season is impressive to begin with”.

He said EPCL and SNGP posted good results with more good results from cyclical sectors to follow next week.

“FATF's grey listing is now the base case. Current strengthening would definitely bring the bulls back. Right now there is a tie between bulls and bears,” Soomro added.

Ansreen Mallik from BMA Capital Market Equity Desk said, “The market has seen profit-taking and a sharp resistance at 40,500 points’ level, while making a psychological support of 40,000”.

"However, political pressures can bring the market down in the coming sessions. Any dips would be good to accumulate banks and E&P shares,” Malik added.

Analyst Ahsan Mehanti from Arif Habib Corporation said, “Stocks closed lower amid slumping global equities and crude oil prices, and uncertainty over FATF decision on Pakistan this month”.

Early session support was witnessed after G20 group under its Debt Service Suspension Initiative (DSSI) rescheduled Pakistan’s debt repayment worth $1.8 billion by another 6months, while rupee recovery also helped.

“Investor concerns over political noise, hike in power tariff and weak earnings outlook for the quarter-end announcements weighed on trade,” Mehanti added.

Nestle Pakistan, up Rs200 to close at Rs6,600/share, and Island Textile, up Rs71.97 to finish at Rs1,031.67/share, emerged as the top gaining shares of the day, while Rafhan Maize, down Rs300 to close at Rs8,050/share, and Pakistan Tobacco, losing Rs40 to close at Rs1,600/share, took the biggest hits.

Hascol Petrol, up Rs0.25 to end at Rs15.52/share, topped the volumes chart with 30.635 million shares, whereas Pakistan Elektron, down Rs0.38 to end at Rs30.04/share, was at the bottom with 10.314 million traded shares.