Stocks topple on PTI’s senate poll debacle

Stocks caved in on Thursday after the government suffered a political fiasco in Senate elections, while a spike in rates on Pakistan Investment Bonds also wounded the sentiment, dealers said.

Pakistan stock exchange (PSX) KSE-100 shares index shed 1.91 percent or 882.24 points to close at 45,278.54 points.

Prime Minister Imran Khan’s senate candidate Finance Minister Hafeez Shaikh lost a closely-fought battle against the opposition-backed former Prime Minister Yousuf Raza Gilani.

“Subsequent to the loss, PM has announced a vote of confidence on Saturday in order to restore confidence in the government. This would take down the political turmoil,” analysts said.

Traded volume increased 10 percent day-on-day to 441 million shares and traded value decreased 9 percent at Rs21.21 billion.

Of a total of 412 active scrips, 46 advanced, 358 retreated and 8 ended neutral.

Topline Securities in a note said the index had lost 1,073 points at one point in the day; however, some late bargain-hunting helped it reclaim around 350 points; however, the initial sentiment prevailed.

Cement sector dented the index the most by 158 points followed by Banks 138 points, while TRG took 52 points rounding up the major portion of laggards in today’s trading session, the brokerage added. KSE-30 Shares Index also gave up 2.08 percent or 400.74 points to close at 18,898.29 points.

Ahsan Mehanti at Arif Habib Corp said stocks closed record lower on political uncertainty after Prime Minister announced to seek vote of confidence from National Assembly on senate election result disappointment.

Investor concerns over $17.64 billion trade deficit for July-February FY21, surge in National Saving Schemes (NSS) rates and government bond yields on higher CPI inflation were the main downers for the day, he said.

Incumbent government’s defeat at Senate elections hit the index like a wrecking ball right at the opening bell.

Arif Habib Limited in a report said recovery ensued on the expectation of a vote of confidence by Prime Minister, which brought the index from -1073 points to -350 points during the session.

Selling was observed across the board, it said adding, by midday prospects of redemption on mutual funds’ end brought the index under pressure again, continuing till the session-end that saw market taking a double dip to end 882 points lower.

“PTI-led coalition remains in power and now requires less resistance on the legislation front. Our market can take little hit due to political disturbance, however, we expect this event will eventually become a non-event for the market,” an analyst at Insight Securities said.

“We believe a positive journey in equity market should continue given strong external position under the direction of IMF program, improvement at the fiscal deficit front and strong recovery in corporate earnings.” the analyst added.

Colgate Palmolive, rising Rs150 to close at Rs2,900/share, and Sunrays Textile, growing Rs74.97 to close at Rs1,074.58/share, were the top tow gainers of the day.

Sapphire Fiber, shedding Rs49 to close at Rs880/share, and Wyeth Pakistan, dropping Rs32.49 to end at Rs917.51/share, were the bottom two losers.

K-Electric Limited was the volume leader (33.106 million shares), followed by Ghani Global (28.66 million), and TRG Pakistan (25.827 million).