Stocks plunge as political worries weigh heavy

Stocks landed hard on Monday after renewed political noise shot down the PM trust vote victory rally amid lack of triggers, dealers said.

Pakistan Stock Exchange's (PSX) KSE-100 Shares Index shed 1.72 percent or 786.29 points to close at 45,051.06 points. Volumes increased to 459.87 million shares from 317.237 million on Friday. KSE-30 Shares Index shed 1.58 percent or 303.10 points to close at 18,870.73 points. As many as 405 scrips were active, of which 85 advanced, 311 declined and 9 remained unchanged.

Ahsan Mehanti at Arif Habib Corp said support was witnessed after Prime Minister won vote of confidence mainly from institutional buying in oil and banking scrips on surging global crude oil prices and higher banking deposits.

However, concerns over political uncertainty and expectation of power tariff hike under reinstated IMF program to ease circular debt hit the sentiment hard, Mehanti added. Topline Securities in its daily market review said the PSX opened on a positive note, making an intraday high of 595 points mainly on PM Imran Khan’s trust vote victory in National

Assembly, higher international oil prices and international markets.

"Concerns over inflation and continued political noise (Senate chairman election and PDM long march) led the market to make an intraday low of 988 points," the brokerage said.

An analyst at Pearl Securities said the index witnessed another major slump, despite starting the day in the green zone. Bourses took cue from the regional markets, which outturned their opening gains on the back of rising bond yields that shifted investors' interest from equities to bonds, he said.

Moreover, the US Senate passed the $1.9 trillion COVID relief bill but it couldn’t help the declining market sentiments, the analyst added. Dealers said political uncertainty emanating from possible change in Punjab’s political setup perturbed investors, at the same time recent rapid upsurge in inflation also caused investors to think twice about upcoming monetary policy and impact thereof. Resultantly, cement, steel, and oil and gas marketing companies saw major attrition, they added.

Over the weekend increase in international crude oil prices helped energy stocks to stay afloat: however, selling pressure in other stocks led Oil & Gas Development Company to lose 1.19 percent, and Pakistan Petroleum Limited 0.85 percent.

Lucky Cement declined 3.25 percent, Hub Power 2.49 percent, Habib Bank Limited 1.89 percent, DG Khan Cement 5.3 percent and Indus Motor Company fell 6.88 percent. On the other hand, Pakistan Oilfields gained 0.8 percent and Meezan Bank Limited 0.38 percent.

Among highest gainers were Sapphire Textile, up Rs63.65 to close at Rs1,046/share, and Indus Dyeing, up Rs51.63 to close at Rs912.24/share. Major loss-makers were Indus Motor Company, down Rs75.73 to close at Rs1,024.42/share and Philip Morris Pakistan, down Rs54.33 to end at Rs1,300/share.

Azgard Nine Limited led volumes with 29.246 million traded shares. The scrip gained Rs1.05 to close at Rs33.95/share. TRG Pakistan was second on the chart with 21.08 million shares. It gained Rs3.1 to close at Rs145.81/share. Pakistan Refinery was third with a turnover of 17.89 million shares. It gained 53 paisas to finish at Rs26.64.