Stocks spiral deeper into losses on economic scares

Stocks spiraled deeper into losses on Friday as scares of a bump in the road to economic recovery haunted investors into exiting the market in rollover week, traders said.

Country’s key capital market gauge, the KSE-100 Share Index lost 226.74 points or 0.48 percent to close at 47,136.53 points after swinging between a day high of 47,392.24 points and a low of 46,871.08 points.

Ahsan Mehanti at Arif Habib Corp said Pakistan Stock Exchange (PSX) closed lower, mostly weighed down by dismal fiscal deficit data amid weak economic outlook.

Cross border tensions, uncertainty over MSCI decision over PSX emerging market status and concerns over foreign outflows dragged the stocks down during futures rollover week, Mehanti added.

Pakistan’s overall budget deficit has risen to a staggering Rs3.403 trillion, equivalent to 7.1 percent of GDP (Gross Domestic Product), in fiscal year 2020-21 that ended on June 30, 2021.

The primary deficit, considered sacrosanct under the IMF (International Monetary Fund) programme, stands at Rs653.5 billion or 1.4 percent of GDP.

The government had revised the budget deficit target upwards to 7 percent but it crossed it. Many independent economists were predicting the fiscal deficit might hover around 7 to 7.5 percent of GDP for the last fiscal year.

KSE-30 Shares Index also dropped 40.11 points or 0.21 percent to 18,913.79 points.

Traded shares, however, increased 22 million to 382.37 million, while trading value rose to Rs13.29 billion from Rs11.74 billion.

Market capital narrowed to Rs8.25 trillion from Rs8.28 trillion. Out of 469 companies active in the session, 128 gained, 324 fell, while 17 remained unchanged.

According to the Topline Securities daily market review, stocks largely remained under pressure during the trading session.

Being the winning horses, MEBL, SYS, and LUCK cumulatively contributed 100 points to the index, whereas ENGRO, HBL, INIL, SRVI, and OGDC eroded 110 points, the brokerage said.

Indus Motor Company unveiled earnings per share (EPS) of Rs56.1 and declared a final cash dividend of Rs36.5/share in its 4QFY21 financial result. Bank of Punjab’s EPS for 2Q2021 clocked in at Rs1.4. Abbot Laboratories posted an EPS of Rs18.79 along with an Interim cash dividend of Rs20/share for the 2Q2021 period.

Wyeth Pakistan Ltd was the top performer in terms of gains as it rose Rs78.30 to Rs1,874.89/share, followed by Rafhan Maize, up Rs75 to close at Rs10,025/share.

Nestle Pakistan XD was in the dumps, falling Rs50 to Rs5,600/share, followed by Service Industries Ltd that shed Rs36.08 to end at Rs465.93/share.

Stocks that recorded significant turnover included WorldCall Telecom, K-Electric Ltd, Byco Petroleum, Yousuf Weaving, Bank of Punjab, Hum Network, Telecard Limited, TPL Properties, Ghani Global Holdings, and Unity Foods Ltd.

WorldCall Telecom led the volume chart with 31.63 million shares. The share shed five paisas to settle down at Rs3.22 per share. The runner-up, K-Electric Ltd registered a trade of 26.43 million shares and lost two paisas to close at Rs3.70 per share.

Turnover in the future contracts increased to 368.43 million shares from 263.17 million on Thursday.