Stocks lose as mutated virus sets off global rout

Stocks on Monday had a hard landing piloted by energy sector as emergence of a mutated as well as deadlier COVID strain plunged global oil and equity markets in new scares, while some year-end selling ahead of rollover week also weighed, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index lost 0.93 percent or 406.80 points to close at 43,333.76 points. Volumes swelled to 516.465 million shares, as compared with 482.628 million in the previous session. KSE-30 shares index shed 1.22 percent or 223.01 points to end at 18,023.20 points.

Ovais Ahsan, chief executive officer at Optimus Capital Management, said, the market started off the week in negative territory dragged down by oil exploration stocks with OGDC and PPL both losing more than 4 percent following a fall in global prices.

Renewed restrictions and lockdowns in Europe roiled equities around the world with concern of a deadlier virus mutation in the UK hitting commodity and equity markets alike, he said. Twenty one percent decline in cement sales in November on a month-on-month basis also invited selling pressure in the sector as the impact of colder weather impacted off-take, Ahsan added.

Muhammad Saeed Khalid, head of research at Shajar Capital, said despite announcement of advance release numbers for the five months of the current fiscal year, market remained negative during the session, marking an intraday low of 445 points”. The negative sentiment was mainly the result of Pakistan-India tensions, he said.

Khalid said the outburst of third COVID-19 wave in Saudi Arabia and other developed countries including UK, has dashed the hoped for revival of the aggregate demand.

Moreover, despite positivity of the expected hike in dealers' margin, oil marketing companies remained negative mainly on the slumping of international oil prices, Khalid added. Out of 404 active scrips, 154 advanced, 224 retreated, and 26 ended without a change.

A A Soomro, managing director KASB Securities, said equities sagged because negative news reports continued to haunt investors especially foreign minister’s warning that India was likely planning an attack, which the Prime Minister later said would be responded befittingly. Similarly, falling oil prices after new COVID-19 wave in the UK and lockdown in Saudi Arabia raised fears of long and slow recovery, he said. “This week, given the rollover, no imminent trigger and rising geopolitical temperature can remain muted as investors are delaying fresh entries until 2021. Medium term outlook nonetheless remains promising,” Soomro added.

Analyst Ahsan Mehanti from Arif Habib Corporation said stocks fell across the board on late session pressure amid slump in global equities and crude oil markets after reports of a new strain of novel coronavirus pandemic. Investor concerns for rupee instability, gas crisis impacting industries, Nepra approval for power tariff hike for Discos, and uncertainty over IMF’s new terms for EFF (Extended Fund Facility) brought the market down, Mehanti added.

Service Industries Limited, up Rs64.52 to close at Rs924.87/share, and Pakistan Tobacco, strengthening by Rs49 to finish at Rs1599/share emerged as the top gainers of the day. Unilever Foods, down Rs1,000 to close at Rs12,600/share, and Nestle Pakistan, down Rs165 to close at Rs6735/share, were the main losers.

WorldCall Telecom led volumes with 36.557 million shares and gained Rs0.09 to end at Rs1.17/share. PIAC posted the lowest turnover with 12.382 million shares and gained Rs0.41 to end at Rs5.20/share.