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Thursday March 28, 2024

Stocks extend rout on renewed virus fears

By Our Correspondent
October 29, 2020

Stocks lost more gains on Wednesday in volatile trade after government warnings of a second virus wave reignited economic fears amid sliding international capital and crude oil markets, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index lost 0.47 percent or 194.97 points to close at 41,186.86 points. Ready market volumes decreased to 368.423 million shares from 481.047 million in the previous session. The KSE-30 shares index followed suit with a low of 0.46 percent or 80.48 points to end at 17,297.09 points level.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “The short rollover week, second wave of COVID-19 pandemic, political noise, and crude oil slump shattered investor confidence in the local market”.

Investors preferred to exit the market amid renewed fears that second virus wave might slow down the economy

“Next week easing of political issues and any improvement in global stocks and crude oil might help support the falling market,” Ahmad added.

Muhammad Saeed Khalid, head of research at Shajar Capital, said, “Despite notable buying by mutual funds along with other financial institutions during the week, participation-shy investors continued to make capital gains during the week to date”.

“Furthermore, above-expectation financial results also could not revive investors' sentiments in different sectors,” Khalid added.

Of 415 active scrips, 151 improved, 246 lost, and 18 ended unchanged.

Analyst Ahsan Mehanti from Arif Habib Corporation said, “The stocks ended bearish amid weakening global crude oil prices and equities mostly because of economic concerns over the resurgence of coronavirus pandemic”.

The index came under pressure mainly owing to investor concerns over hike in gas tariff for industries, foreign outflows, and higher inflation, Mehanti added.

Muhammad Jawad Vohra from BMA Trading Desk said, “The market opened positively due to solid corporate earnings of mainboard stocks for Q1FY21, but a fear of expected rise in COVID-19 infection ratio resulted in profit-taking in the market”.

"In our view, investors will track the infection ratio locally and globally. Although, emerging risk of pandemic will keep the market in check but any significant dip will create good buying opportunities in mainboard stocks to capitalise on good corporate earnings and improving macros,” Vohra added.

A A Soomro, managing director at KASB Securities, said, “The market saw more selling pressure after the Special Assistant to Prime Minister warned of second wave of COVID-19 as the government starts panicking”.

“The result seasons is showing a V-shaped recovery and keeping the valuation sticky. Long weekend may keep investors at bay,” Soomro added.

Wednesday’s top gainers were Wyeth Pakistan Limited, up Rs35 to close at Rs950/share, and Mitchells Fruit Farms, up Rs32.93 to finish at Rs472.06/share, while the major losers were Indus Motor Company, down Rs39.21 to close at Rs1,206.95/share, and Sapphire Textile, losing Rs35.89 to close at Rs780.12/share.

Posting 60.250 million shares, Unity Foods Limited led the volumes chart and gained Rs0.46 to end at Rs23.17/share, whereas Fauji Fertiliser Bin Qasim recorded the lowest turnover with 9.311 million shares and gained Rs0.32 to end at Rs23.86/share.