Stocks reverse rate-hold rally as virus resurges

Stocks slumped on Wednesday as a monetary policy status quo rally was reversed by renewed scares of economic restrictions as the new Covid variants were reported on the rise in the country, traders said.

Pakistan Stock Exchange's (PSX) benchmark KSE-100 Share Index lost 368.96 points or 0.77 percent to close at 47,318.03 points printing a day high of 47,874.69 points and a low of 47,244.21 points.

Muhammad Arbash, an analyst at Topline Securities, said the day opened on a positive note as central kept the policy rate unchanged.

However, in the second half the market witnessed profit-taking as investors were worried over rising Covid cases, Khan said.

This, he added, was further exacerbated by news reports of a possible 15-day lockdown in Sindh province.

The central bank on Tuesday held its benchmark policy rate to help sustain economic recovery and keep markets stable amid pandemic-related uncertainties.

The Monetary Policy Committee maintained the policy rate at 7 percent as widely expected. The central bank said the latest indicators point to continued improvement in the economic activity and inflation outlook following the recent decline in food prices and core inflation. In addition, consumer and business confidence have risen to multi-year highs and inflation expectations have fallen. Tracking the benchmark, KSE-30 Shares Index also plunged by 155.31 points or 0.81 percent to end at 18,974.30 points.

Ahsan Mehanti, senior analyst at Arif Habib Corp, said global equity selloff, domestic economic uncertainty, concerns regarding impact of fourth pandemic wave on exports, growth, and a weak rupee dragged the index down.

Trade volume shrank 67 million shares to 365.77 million, while trading value dropped to Rs12.26 billion. Market capitalisation decreased to Rs8.279 trillion from Rs8.335 trillion.

Days best gainer was Colgate Palmolive, up Rs93.98 to Rs2,787.98 per share, followed by Gatron Industries that strengthened by Rs35.50 to Rs563 per share.

Wyeth Pakistan Limited was the major loser of the session by shedding Rs44.85 to close at Rs2,031.15 per share, followed by Mehmood Textile, down Rs39.81 to end at Rs504 per share.

Brokerage Arif Habib Limited in a report said the market tumbled in the latter part of the session, which brought the index down by more than 400 points at one point.

“Concerns over latest Covid-led lockdown and probe by the regulator on account of unusual price movement in certain stocks brought the market under selling pressure and became the major reasons for sentiment weakness,” it said.

Earlier part of the session saw institutional investors building positions in cement and steel sectors that caused these scrips to show healthy price uptick; however, later stock prices went down.

Notable turnover was recorded in WorldCall Telecom, Byco Petroleum, Telecard Limited, Unity Foods Ltd, K-Electric Ltd, Hum Network, TPL Corp Ltd, Silk Bank Ltd, TPL Properties and Sui North Gas XD.

WorldCall Telecom was the volume leader with 40.37 million shares. The scrip lost 17 paisas to close at Rs3.57 per share. Byco Petroleum was the second most traded stocks with 26.89 million shares and it lost 16 paisas to settle at Rs9.90 per share.

Turnover in the futures contracts reduced to 256.37 million shares from 282.26 million traded in the previous session.