Stocks end flat on C/A deficit nerves

Stocks flatlined on Tuesday after hitting a brick wall at around 47,000-mark because of profit-selling that mainly broke out owing to nerves over current account deficit numbers, upcoming FATF review, and political noise, dealers said.

The capital market continued to face adjustments and profit taking as investors showed concern over the upcoming FATF meeting and political rallies called by the opposition, dealers said.

KSE-100 shares index lost 0.1 percent or 47.1 points to close at 46,674.77 points at Pakistan Stock Exchange (PSX). Volumes increased to 664.033 million shares, from 428.626 million on Tuesday. KSE-30 shares index dipped 0.07 percent or 13.26 points to end at 19,486.59 points.

Santosh Kumar, portfolio manager Darson Securities said, the local equity market continued to linger under pressure with investors opting to profit-taking, thus pushing the index into the red.

The market showed some affirmative activity in the first few hours of the session to hit a day-high of 46,990.92 points; however, it could not sustain the momentum and adopted a negative trend for the rest of the session, Kumar added.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities said, “The market has been in a technical correction phase and adjustments are healthy for the market”.

“The index has been facing resistance at 47,000 points and need some big positive development on the economic front to come out of the present selling mode,” he said.

The outcome of the talks with IMF and upcoming FATF review would decide the course of the market, Ahmad added.

Despite decline in trade balance on month-on-month basis, “we have noticed fragility in the market where KSE-100 index marked an intra-day high of 270 points”.

Of 420 active scrips, 191 gained 212 lost, and 17 remained unchanged.

Muhammad Saeed Khalid, head of research at Shajar Capital said the index remained sluggish during the day mainly on the expected announcement of current account deficit for the month of January 2021.

Investors remained bullish in the oil and power scrips where updates on payments to IPPs and rising oil prices induced investor participation in the sectors, Khalid said adding that they also accumulated in the tech stocks, expecting a rise in services numbers and foreign inflows in the sector.

Mohammad Abdur Rafay, research analyst at Pearl Securities said profit-taking was witnessed at the bourses today as the investors waited for the MSCI quarterly review, scheduled Wednesday. Cabinet Committee’s approval for the payment of Rs403 billion to IPPs was seen triggering positive sentiments in the energy chain, he said. “We expect the market to remain volatile, therefore, we suggest investors to adopt the ‘sell on strength’ strategy in the coming days,” Rafay added.

Analyst Ahsan Mehanti from Arif Habib Corporation said stocks closed lower amid consolidation post major earnings announcements at the PSX.

Oil and banking stocks outperformed on record financial payouts and after Brent Crude reaches near to $60, he said.

Uncertainty over outcome of FATF review next week, surge in local power tariff, concerns over $14.96 billion trade deficit for Jul- Jan 2021, and fiscal deficit yawning to Rs1.13 trillion for July-December 2020 weighed on the stocks, Mehanti added.

Khyber Textile, up Rs20.45 to close at Rs293.50/share, and National Refinery, strengthening by Rs19.44 to finish at Rs514.07/share, were the major gainers. Rafhan Maize, down Rs269.13 to close at Rs10527.43/share, and Nestle Pakistan, losing Rs142.50 to close at Rs6,298.33/share, were the main losers.

Telecard Limited led volumes with 62.859 million shares, gaining Rs1 to end at Rs5.89/share, while Byco Petroleum’s trade was thinnest with 19.197 million shares, but it gained Rs0.31 to end at Rs9.52/share.