Index plumbs 2pc on second wave virus fears

The index shed almost two percent on Monday owing to sharp decline in crude oil prices and emergence of a second wave of Covid-19, which in the country as well as in Europe and the US might hit the struggling economy once again, dealers said.

All major heavy weights from financial, energy and cement sectors were under pressure. Overall activity in the market however, remained relatively thin.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 1.94 percent or 775.82 points to close at 39,112.18 points level, while volumes decreased to 322.289 million shares, as compared with the turnover of 541.779 million shares in the previous session.

KSE-30 shares index followed suit with a low of 2.07 percent or 346.92 points to end at 16,403.45 points level. Arif Rehman, director research at Fortune Securities said, “The market was caught under bearish spell primarily on account of spiralling corona cases in the country and lockdowns in Europe.”

Investors preferred to reduce their leveraged positions with lack of positive news flow and uncertainty around another possible lockdown. “Major value destruction was witnessed in oil stocks with international oil prices falling on account of economic slowdown from globally rising corona cases,” he added.

Trading activity was recorded in 396 active scrips, of which 87 increased, 294 lost, and 15 remained unchanged. Analyst Ahsan Mehanti from Arif Habib Corporation also pinned declines on plunge in global crude prices and equities amid fears of the second wave of Covid-19. However, mid-session support was witnessed on account of pharmaceutical exports, up 22.6 percent in Q1FY21, and record cement sales in September 2020, with exports up 41 percent. “Foreign outflows and IMF forecasts over subdued economic growth rate for FY21 at 0.5 percent and over leveraging played a catalytic role in the bearish close,” Mehanti added.

AA Soomro, managing director KASB Securities said, “As expected, the index bled again due to a) political noise post Ayaz Sadiq’s comments, b) 4 percent infection rate, c) fears of lockdown, and d) much severe second wave.”

Low oil prices did not help the index either. With no imminent short-term positive triggers, investors eye the US elections and were selling from weak holders to stabilise the bears. “Expect more volatility amid political noise,” Soomro added.

Salman Ahmad, head of institutional sales at Aba Ali Habib said "Market under turbulent waters because of technical factors as some Rs6 billion worth of future contracts were still unsettled, which would be adjusted by Tuesday to help support.”

Moreover, US elections and rising corona cases have also cast dark clouds over investors, Ahmad added. Top gainers were Rafhan Maize, gaining Rs125.00 to close at Rs8,325.00/share, and Unilever Foods, up Rs100.00 to finish at Rs13,000.00/share.

Pakistan Tobacco, down Rs122.96 to close at Rs1,527.04/share, and Bata Pakistan, losing Rs118.85 to close at Rs1,469.90/share, were the main losers.

With 32,404 million shares, Hascol Petrol was on the top of the volumes chart, down Rs1.07 to end at Rs13.82/share, whereas Fauji Foods Limited turnover with 9.102 million traded shares was at the bottom, and it lost Re0.94 to end at Rs13.86/share.