Stocks extend losses as full lockdowns feared

Stocks sank deeper on Thursday with energy and cyclical getting most of the beating as the country mulls complete virus lockdown in urban centers, dealers said.

Benchmark KSE-100 Shares Index gave up 0.83 percent or 376.93 points to close at 44,929.61 points at Pakistan Stock Exchange (PSX). Volumes slipped to 328.93 million shares from 387.908 million on Wednesday.

A A H Soomro at KASB Securities said stocks extended the fall with selling seen across the board as fears of possible coronavirus-related lockdowns in Pakistan’s biggest cities, as hinted by NCOC (National Command and Operation Centre) chairman Asad Umar, cast doubts on prospects of economic recovery.

“Refinery stocks opened positive after reports the Ministry of Energy is likely to submit new refinery policy to the Economic Coordination Committee of the Cabinet next week; however, the gains were short-lived and selling pressure took toll on refinery stocks,” Soomro added.

KSE-30 Shares Index also closed 0.69 percent or 128.29 points lower at 18,375.17 points.

Topline Securities in a note said equities remained under selling pressure over rising Covid-19 cases and upcoming rollover week. However, after a slight positive opening market traded sideways, the brokerage said.

Ahsan Mehanti at Arif Habib Corp said stocks fell sharply lower amid slump in global crude oil prices and pre-budget uncertainty.

Uncertainty ahead of FATF review decision on Pakistan’s exit from grey list next month, concerns over rupee instability and rising circular debt dragged the index down, Mehanti added.

As many as 390 scrips were active, of which 92 gained, 276 lost, and 22 closed without a change.

Muhammad Mubashir at JS Global Capital said NCOC warned of more restrictions and imposing a complete lockdown in major cities to control the worsening situation of Covid-19 in the country, which kept the market under pressure.

Moreover, British High Commissioner Christian Turner statement that the UK would fully support Pakistan on the issue of Financial Action Task Force (FATF) was taken positively by investors, Mubashir added.

Moreover, decent activity was witnessed in Engro Corp, up 1.2 percent, and United Bank, up 4.1 percent, following their result announcements.

Brokerage Arif Habib Limited in a report said concern over growing Covid cases and incidence in major cities thereof kept investors perturbed for the second day as well, where despite healthy earnings posted by companies, the index eventually lost 424 points.

Energy, cement, steel scrips contributed the most to the decline, whereas banking sector stocks picked up, the brokerage added.

It said notable scrips that declared results were Engro and UBL, which made the announcement at the beginning of the session that included dividend; however, selling pressure brought the stock prices down by the end of session.

Going forward the direction of the market will be defined by the decision of the NCOC on the extent and nature of the lockdown.

Sapphire Textile, up Rs55.16 to close at Rs969.99/share, and AKD Capital, up Rs29.27 to close at Rs480.77/share, were the top gainers of the day.

Bata Pakistan, down Rs99.99 to close at Rs1,800/share, and Pak Suzuki, down Rs25.39 to end at Rs313.17/share, ended the day as the worst losers.

Ghani Global was the volume leader with a turnover of 36.37 million shares, followed by TRG Pakistan with 30.20 million shares, and Worldcall Telecom that saw its 26.89 million shares changing hands on Thursday.