Stocks slump as virus spike panics investors

Stocks on Friday yielding under profit-selling pressure after highest one-day rise in virus cases sent investors bracing for another economy-stalling lockdown, while uncertainty over monetary policy announcement and the upcoming rollover week also did sentimental damage, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.87 percent or 353.52 points to close at 40,187.18 points, while volumes marginally increased to 189.857 million shares, as compared with 188.567 million in the previous session.

Topline securities in its market review said lackluster activity was observed during the first half of trading session where index continuously juggled between positive and negative zone with low volumes.

It said however pressure was observed during the second trading session, where index heavy banking sector led the decline in the market.

“Pressure in market can be attributed to investor’s factoring in highest single-day spike in coronavirus cases since July 2020,” the brokerage said in its report. KSE-30 shares index also went down 0.9 percent or 153.34 points to end at 16,903.30 points.

Muhammad Saeed Khalid, head of research at Shajar Capital, said, the market remained dull during the day, mainly on the expected lockdown to be imposed in Karachi next week.

Investors remained net sellers and booked capital gains during the day on the announcement of Monetary Policy later on Monday, he added.

“During the day we have noted that 241 scrips remained laggards in the All Share index,” Khalid said.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said the index slid because of lack of positive triggers rather than rising corona cases in the country, while rollover week ahead also added to the selling pressure.

“However, there have been worries about monetary policy announcement. Though economy is still picking up, given the rise in corona cases, the central bank may keep interest rates unchanged, which some say can go up by 25 to 50 bps,” Ahmad added.

Trading activity was recorded in 380 active scrips, of which 107 advanced, 256 retreated, and 17 remained unchanged.

Muhammad Faizan Munshey, associate director at KASB Securities, said, equities closed lower as Pakistan recorded highest single-day spike in coronavirus cases since July, which raised fears about the return of the lockdown restrictions to curb the spread”. Cement stocks remained under pressure throughout the day amid news reports of Competition Commission of Pakistan’s raid on Karachi offices of Cement Manufacturers, he added. "We believe worsening coronavirus case numbers may make more stringent restrictions imperative, which will have a negative impact on the economy and the market,” Munshey said.

Analyst Ahsan Mehanti from Arif Habib Corporation, said, stocks closed bearish amid thin trade on institutional profits-taking in post earnings season and uncertainty over terms of Pakistan-IMF talks over resumption of loan facility”.

“Foreign outflows, rupee instability, and uncertainty in global equities dragged the index down, Mehanti added. Phillip Morris Pakistan, up Rs58.99 to close at Rs1,498.99/share, and Wyeth Pakistan Limited, up Rs33.20 to finish at Rs1043.53/share were the top gainers of the day.

Nestle Pakistan, down Rs22.25 to close at Rs6500.00/share, and Shield Corporation, losing Rs19.94 to close at Rs255.06/share, sustained most losses.

Unity Foods Limited was on the top of the volumes chart with 39,722 million shares and gained Rs0.39 to end at Rs23.72/share, while Hascol Petrol was at the bottom with 3.703 million shares, and it lost Rs0.22 to end at Rs14.12/share.