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October 23, 2020

Stocks fall as profit-taking cuts results rally short

Stocks on Thursday snapped a three-day rally as profit-selling blew holes in energy and banking sector in a jerky as well as low-spirited session amid eroding hopes of Pakistan’s white-listing by the global terror financing watchdog, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index suffered a loss of 0.81 percent or 336.90 points to close at 41,199.02 points, while ready market volumes decreased to 500.098 million shares from 661.276 million on Wednesday. KSE-30 also fell 0.89 percent or 155.14 points to end at 17,363.18 points level.

Arif Rehman, director research at Fortune Securities, said, “Overall, the market seems to have gone into a healthy correction today after a sharp rise over the last few days. New buyers stayed away owing to FATF uncertainty”.

Also, in view of the upcoming rollover week, investors decided to book gains and stay on the sidelines, Rehman added.

As many as 408 scrips were in play today, of which 124 managed to gain, 261 took hits, and 23 ended without a change.

Fahad Rauf, deputy research at Ismail Iqbal Securities said, “Investors chose to remain on the sidelines as FATF is expected to release all important decision on Friday”.

Moreover, increase in COVID-19 cases and talks of another lockdown also kept investors at bay, Rauf added.

Shahab Farooq, director research at Next Capital Securities, said, “After gaining around 4 percent or 1500 points in four sessions, the benchmark index witnessed profit-taking and closed in red”.

“Stocks from banking and energy sectors bore the major brunt, with rupee against appreciation against the dollar having a negative earnings impact on the later,” he added.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “The stocks closed lower bearish amid slump in global equities and uncertainty over FATF decision on exclusion of Pakistan from grey list.”

Investor concerns over political noise, hike in power tariff, and weak earnings outlook for the quarter-end announcements resulted in bearish close, Mehanti added.

A A Soomro, managing director at KASB Securities, said, “The market was in a sombre mood because of fading FATF whitelisting expectations and NCOC’s warning of another lockdown amid rising COVID-19 infections”.

However, the result-based rally was strong especially in the banking and fertiliser sector, he said.

“The market will take cue from results’ surprises and flows from high-net-worth individuals in the next few sessions,” Soomro added.

Ansreen Malik from BMA Capital Management equity desk said, “In the coming sessions the market looks volatile as FATF sessions have started and any news coming out of them will dictate the trends down the line”.

“The market looks strong fundamentally and there is no such negative news to bring the market down so any dips are good for the investors to invest in banks and E&Ps, which are quite undervalued at these levels,” Malik added.

Gatron Industries, up Rs40 to close at Rs700/share, and Khyber Tobacco, up Rs23.96 to finish at Rs343.49/share, were the top gainers, while Bhanero Textile, down Rs74.99 to close at Rs925/share, and Mari Petroleum, down Rs26.65 to close at Rs1306.37/share, were the worst losers of the day.

With 61.308 million shares, Unity Foods Limited, up Rs0.77 to end at Rs21.77/share, was on the top of the volumes chart, whereas Hum Network, up Rs0.43 to end at Rs8.21/share, was at the bottom with 9.559 million traded shares.