Stocks slip as caution prevails amid global selloff

Stocks on Friday swung wildly to settle lower amid a global selloff as investors erred on the side of caution despite FATF cheers, dealers said.

Topline Securities in a report said Pakistan Stocks Exchange (PSX) witnessed a choppy session and its benchmark KSE-100 shares index swung between a high of +274 points and a low of -212 points to eventually lost 100 points to close at 45,856 points.

“The market initially cheered the FATF decision which stated that Pakistan has made significant improvement and has been given time till June 2021 to comply with the remaining 3 points; however, the last day of the futures rollover weighed in the end,” the brokerage added.

The ready market volumes were barely changed at 479.98 million shares, compared to 468.97 million shares in the last trading session. As many as 417 scrips were active of which 144 advanced, 257 declined, and 16 remained unchanged.

KSE-30 shares index shed 0.14 percent or 26.07 points to close at 19,173.08 points. Ahsan Mehanti at Arif Habib Corp said stocks closed lower in the future contracts rollover week as investor weighed FATF’s decision of keeping Pakistan on the grey list and weak global equities.

“Investor concerns over political uncertainty, slump in global crude oil prices, and likely IMF condition for revision of power tariff on industries proved a drag on the market”.

Despite higher-than-expected financial result announcements for textile, food, and other stocks, investors remained cautious during the day.

Further, market also remained sluggish on the lower international oil prices along with the uncertainty on new circular debt agreement for the IPPs and power sector, where HUBC and other

stocks remained dull, despite unveiling better earnings in the 1HFY21.

An analyst at Arif Habib Limited said market traded in a narrow range. “FATF’s decision to maintain status quo for Pakistan till June 2021 saw a lukewarm welcome from Investors,” the analyst said.

He added that profit-booking was witnessed almost across the board, including technology, cement, and textile sector stocks, whereas oil and gas marketing companies faced aggressive selling, especially PSO, which was still in the line of fire for announcing disappointing earnings.

Cement sector rallied earlier in the session, betting on healthy sales in the ongoing month; however, profit-booking at the end of session cut it short.

Major positive contributors were Lucky Cement (+57 points), Habib Bank Limited (+34 points), Searle (+21 points), and Fauji Fertilizer (+18 points).

Among the downers were Oil and Gas Development Company (-54 points), TRG Pakistan (-45 points), Nishat Mills (-16 points), and National Bank (-13 points).

Mehmood Textile, securing Rs38 to close at Rs555/share, and Shield Corporation, up Rs27.18 to close at Rs389.67/share, emerged as the top two gainers of the day.

Colgate Palmolive, down Rs203.97 to close at Rs2,666.02/share, and Rafhan Maize losing Rs200 to end at Rs10,000/share, were the worst hit stocks.

Unity Foods led volumes with 45.36 million shares. The scrip shed Rs1.57 to close at Rs31.38/share. Telecard Limited was the second highest traded stock with 36.66 million shares.

It gained 3 paisas to close at Rs7.91/share. TRG Pakistan was third on the volume chart registering a trade of 33.15 million shares. It shed Rs4.18 to finish at Rs142.06.