Stocks dip after govt vetoes trade with India

Stocks on Thursday cheered the government’s dovish lockdown policy and booed its hard line against opening trade with India to close on a red note, dealers said.

Pakistan Stock Exchange’s (PSX) KSE-100 Shares Index market lost 0.36 percent or 159.87 points to settle at 44,428 points. Total traded volume shrank 30 percent to 312 million shares and value slumped 33 percent to Rs17.3 billion over Wednesday.

Topline Securities in a note said the day kicked off on a positive note as no imposition of a general lockdown was announced by the PM Imran Khan in the cabinet meeting, which drove the sentiment with the index making an intraday high of 289 points, the brokerage said.

However, for a second day in a row, the last hour of trading saw selling pressure where, investors took to profit-taking, it added.

As many as 391 scrips were active of which 102 advanced, 278 declined, and 11 remained unchanged.

Ahsan Mehanti Arif Habib Corp said stocks closed lower amid thin trade amid concerns over slower World Bank projected growth of 1.3 percent for FY21 and government’s disapproval for import of cotton and sugar from India.

Early session witnessed gains on exports growth to $2.345 billion for March and Moody’s improved B3 rating on US dollar denominated bonds, he said.

However, weak global crude oil prices and rising trade deficit spurred late selling, Mehanti added.

KSE-30 shares index shed 0.14 percent or 26.43 points to close at 18,242.19 points.

An analyst at Arif Habib Limited said the market was range-bound. “Federal cabinet’s decision not to import cotton yarn and sugar from India, added to the confusion amongst investors, who had warmly welcomed the hint of it.”

“On the other hand, leverage positions in tech and refinery stocks are continually causing selling pressure in the market, whereby declining prices of pertinent stocks made the concerned investors revisit the investment decision,” the analyst said.

Selling pressure was evident in cement, steel, banks, which brought the index down by the end of session.

News of vaccine manufacturing by Searle helped the stock make a leap towards upper circuit.

Similarly, Engro hit upper circuit on the expectation of new investment in a polypropylene plant.

Danish Ladhani at JS Global Capital said the rollercoaster ride continued at the PSX and the index made an intraday high and a low of +290 and -254 points.

Technology and refineries sectors plummeted to close in the red belt due to the selling pressure.

Attock Refinery fell 7.1 percent closed near limit down, while Netsol Technologies lost 7.5 percent closed in the lower circuit.

Moreover, Searle Pakistan gained 4.9 percent to close near the upper circuit after it announced that it had successfully concluded an exclusive licensing and supply agreement for a Covid jab with Livzon Mapharm Inc.

Analysts expect the market to remain volatile amid increasing corona cases, and recommend investors to sell on strength and buy on dips.

The best gainers of the day were Service Industries, rising Rs84.05 to close at Rs1,204.73/share,

and Gatron Industries that strengthened by Rs30 to close at Rs579.99/share.

Bata Pakistan, dropping Rs54 to close at Rs1,900/share, and Phillip Morris, falling Rs56.34 to end at Rs981.66/share, were the worst losers of the day.

Byco Petroleum led volumes with 30.34 million shares, followed by TRG Pakistan posting 25.43 million shares, and Ghani Global registering a trade of 17.92 million shares.