Stocks flat as sentiment succumbs to economic nerves

KARACHI: Stocks on Friday got off to a good start but eleventh-hour selling flattened the rally as lingering undercurrents of economic uncertainty preyed on sentiment, traders said.

Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index gained just 54.41 points or 0.12 percent to close the day at 46,957.47, testing a session top of 47,115.95 points and a bottom of 46,880.98 points.

According to Ahsan Mehanti, an analyst at Arif Habib Corp said, stocks showed recovery amid surging global equities and global crude oil prices, while upbeat data on petroleum products sales, surging 22 percent year-on-year in July-August 2021, also improved sentiment.

Surging local cement, steel, and fertiliser prices, firm S&P ratings on debt with a stable outlook, speculations on likely EU approval to GSP plus exports status led to a positive close, Mehanti said.

KSE-30 Shares Index also rose 45.09 points or 0.24 percent to 18,851.16 points following the benchmark’s suit.

Traded shares, however, shrank 80 million to 464.97 million shares, while trading value decreased to Rs12.22 billion from Rs16.06 billion. Market capital remained flat at Rs8.240 trillion. Out of 526 actives in the session, 201 posted gains, 311 losses, while 14 closed as they had opened posting no change.

Analyst Nabeel Haroon at Topline Securities, said, the market largely remained in the positive zone throughout the trading session with the index hitting an intraday high of 210 points; however, it failed to sustain momentum.

The major contribution of 229 points to the index came from JLICL, ABOT, SYS, MCB and DAWH.

Unilever Foods was the top gainer of the day, up Rs372.63 to close at Rs22,096/share, followed by Allawasaya Textiles, up Rs65.52 to Rs939.17/share.

Wyeth Pakistan Ltd suffers worst losses as it lost Rs30 to end at Rs1,700/share, followed by Indus Motor Co that shed Rs23.62 to settle down at Rs1,295.01/share.

Traders said an increase in the shipping prices, resulting in a delay in shipments would leave a negative impact on the sectors that import raw materials. The automobile and textile sectors would suffer from the increasing shipment prices, they added.

Mashood Khan, an auto sector expert, said shipment delays and an increase in freight charges in the past two months weighed down on the auto parts supply chain.

“If we are unable to control these basic parameters, then shortages are inevitable,” Khan said.

For instance, he said, shipment from the Qingdao port used to take 25 days previously; however the period had now increased to almost 60 days.

“Similarly, prices have also increased several times. A 40 feet container used to cost $2,000, now it costs $11,000,” Khan added.

Service Fabrics (R) was the volume leader with 83.57 million shares. It gave up 98 paisas to end at Rs4.87/share. It was followed by WorldCall Telecom that posted a trade of 50.60 million shares. The stock gained five paisas to close at Rs3.55/share.

Other stocks that also recorded significant volumetric activity included Telecard Limited, Ghani Global Holdings, Byco Petroleum, TPL Corp Ltd, Yousuf Weaving, TPL Properties, Hum Network and Treet Corp.

Volumes in the futures contracts shrank to 106.80 million shares from 139.35 million traded in the previous session.