Stocks stay sluggish as virus curbs take effect

Stocks stayed the sluggish course on Thursday as the government started enforcing restrictions to contain the second virus wave amid concerns over IMF conditions that seek more central bank autonomy, removal of power subsidies, and tax regime rationalisation, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.06 percent or 26.03 points to close at 40,540.70 points, while volumes increased to 188.567 million shares, as compared to 145.897 million in the previous session. KSE-30 shares index was up 0 percent or 0.15 points to end at 17,056.64 points.

Topline Securities in a report said the market had opened positive, making an intraday high of 230 points on higher international oil prices, Pfizer COVID-19 vaccine success rate, and the current account surplus of $382 million.

“However, lack of volumes and implementation of smart lockdown in several parts of the country dented investors sentiments,” the brokerage said.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, the trend was almost same since last three sessions as investors were perturbed over the rise in coronavirus cases, IMF review, and political uncertainty.

“Though vaccine results are positive but it will take a year to arrive. Economic fundamentals are positive like current account is in surplus for four months in a row, but clarity is required on IMF and political front. Once cleared, the market may stage a rebound,” Ahmad added.

Muhammad Saeed Khalid, head of research at Shajar Capital, said the benchmark index performed earlier during the session, mainly on the announcement of detailed trade numbers, triggering heavy buying in textile and technology stocks.

"The benchmark index was volatile on concerns over higher COVID-19 cases being reported on daily basis,” Saeed added.

Trading activity was recorded in 379 active scrips, of which 170 gained, 188 lost, and 21 remained unchanged.

A A Soomro, managing director at KASB Securities, said, the day started with a positive opening drawing strength from a current account surplus of $382 million in October. Nonetheless, selling pressure at higher levels precipitated profit-taking amid corona worries that brought the index down in the last two hours of the trading session, he added.

“Going forward we believe recovery in cyclical sectors is contingent upon the flattening of the second wave” Soomro said, adding, “However, a bumpy road lies ahead.”

Analyst Ahsan Mehanti from Arif Habib Corporation, said, "Stocks closed positive led by cement, banking and oil scrips as investors weighed SBP’s upbeat projections of 1.5 percent to 2.5 percent growth in FY21, positive results from COVID vaccines and strong July-October FDI data”.

Higher global crude oil prices, upbeat home remittances in October, strong LSMI output growth, surge in textile exports for July-September held the stocks in the green, Mehanti added.

Top gainers were Unilever Foods, up Rs749 to close at Rs13,498/share, and Nestle Pakistan, up Rs52.26 to finish at Rs6,522.25/share.

Phillip Morris Pakistan, down Rs60 to close at Rs1,440/share, and Shezan International, losing Rs13.85 to close at Rs313.15/share, were the main losers.

TRG Pakistan Limited saw the highest trades with 27,138 million shares and gained Rs1.95 to end at Rs55.75/share, while Pakistan Refinery witnessed the lowest with 4.392 million and lost Rs0.07 to end at Rs18.22/share.