Virus wrecks stocks in third wave havoc

Stocks collapsed on Monday as a worsening virus crisis spooked investors into squaring their positions before the lockdowns turned ugly, dealers said, adding economic situation also weighed.

Topline Securities in a note said equities opened the week on a bearish note with the KSE-100 Shares Index closing at 43,548, after losing 1.70 or 752.74 points at the Pakistan Stock Exchange (PSX).

Concerns over the third wave of Covid coupled with a higher trade deficit dampened investor sentiment at the bourse, the brokerage said. Topline report said the major laggards in today’s session were namely TRG, SYS, HBL, LUCK, and UBL that cumulatively dragged the benchmark index lower by nearly 255 points.

Ready market volumes stood at 302.80 million shares compared with the turnover of 266.84 million in the last trading session. Arsalan Soomro at KASB Securities said equities started the session with a vertical fall, which continued till the end as the investors remained in panic selling mode amid sharp rise in coronavirus infections and fears of strict measures to curb the pandemic, as hinted by the Prime Minister.

“March 2021 trade deficit widened by 118 percent to record at $3.2 billion, which also fueled negative sentiments,” Soomro said. KSE-30 shares index shed 1.76 percent or 319.10 points to close at 17,851.24 points.

As many as 391 scrips were active of which 61 advanced, 322 declined and 8 remained unchanged. Ahsan Mehanti at Arif Habib Corp said stocks fell sharply lower amid pressure in scrips across the board as investors weighed rising trade deficit and a higher inflation rate of 9.1 percent. “Institutional support remained in oil and cement stocks on reports of 44.4 percent surge in cement sales and 49 percent in petroleum products sales, he said.

However, investor concerns over foreign outflows, slump in global crude oil prices, and economic uncertainty brought the index down, Mehanti said. Arif Habib Limited in report said the market was in dumps with a major slide of 830 points during the session.

“Although overall leverage has come down, the stocks which sustained high levels of leverage positions came crashing down after failing to make a forward move,” the brokerage said.

Besides lockdown concerns due fast-spreading Covid in Punjab, investors became perturbed by the IMF conditions that hint of rising cost of production for the industries as well as withdrawal of tax exemptions that has seen no end, unless the matter is deliberated and finalised in the Finance Act”.

Saeed Khalid at Shajar Capital said investors remained cautious mainly on the appreciating rupee which caused tech and export oriented stocks to plunge during the day. “In addition to this, rising Covid cases along with the imposition of lockdowns in the Punjab and Sindh, sparked concerns over business stability and confidence of the consumers in the country,” he said.

On the other hand, prevailing uncertainty about trade with India also dragged down investors’ confidence in trade and business industries, Khalid said. Sapphire Textiles growing Rs64.60 to close at Rs925.97/share and Sapphire Fiber, rising Rs54 to close at Rs855/share were the best gainers of the day.

Rafhan Maize, down Rs700 to close at Rs9,500/share and Colgate Palmolive, falling Rs97.99 to end at Rs2,750.01/share, landed highest losses in the day. TRG Pakistan led volumes 24.56 million shares, followed by Dost Steel Mill, with a turnover of 24.4 million shares, and Silk Bank that recorded a trade of 20.019 million shares.