Stocks flat as rupee extends fall

Stocks languished on Monday in a noncommittal environment as foreign selling, freefalling rupee, and inflating trade deficit continued to give investors cold feet, traders said.

The KSE 100-Shares Index, country’s key equity gauge, eased by 38.95 points or 0.08 percent to 46,918.52 points at Pakistan Stock Exchange (PSX). It explored a high of 47,087.84 points and a low of 46,885.85 points during the session.

Zafar Moti, former director PSX, said the market was performing well in the morning and volumes were also increasing, but further depreciation of rupee against dollar dented the sentiments.

“Pakistani rupee has become the weakest currency in Asia,” he said. Moti said the situation in Afghanistan also affected the market and there were concerns over possible sectarian tensions.

“Pakistani politics of both the opposition and the government, on the other hand, is not having any positive impact on the market,” he said. “There is a need to stabilise the currency and control the inflation,” Moti stressed.

KSE-30 Shares Index also ended almost unchanged with a decline of 3.18 points or 0.02 percent to 18,847.98 points. Traded shares, however, shrank 47 million shares to 417.85 million shares. The trading value fell to Rs12.02 billion from Rs12.22 billion. Market capital improved to Rs8.245 trillion from Rs8.240 trillion. Out of 382 companies active in the session, 164 posted gains, 203 losses, while 15 ended neutral.

Haris S Khan, an analyst at Topline Securities, said, a lackluster session was observed at the bourse. To note, concerns regarding a ballooning trade deficit coupled with a potential reclassification of Pakistan from the MSCI Emerging Market Index to the MSCI Frontier Market Index kept the investors at bay, Khan said.

On the results front, FCCL announced its FY21 earning per share (EPS) of Rs2.52 as compared to an LPS of (Rs0.04) in the same period last year. However, it succumbed to selling pressure as investors, disappointed over no payout, punished the stock, pushing it down by 2.69 percent to close at Rs19.50.

The highest increase was recorded in shares of Rafhan Maize, which surged by Rs780 to Rs11,280 per share, followed by Allawasaya Tex that jumped Rs70.43 to Rs1,009.60 per share.

A major decline was noted in the shares of Gatron Industries, which fell by Rs41.68 to Rs516.22 per share, followed by Dynea Pakistan that dropped by Rs18.89 to Rs279.86 per share.

Ahsan Mehanti, an analyst at Arif Habib Corp said, stocks closed lower amid fears on the outcome of MSCI decision over PSX market reclassification this week.

Foreign outflows, weak rupee, and concerns over trade gap widening to $4.23 billion in August 2021 led to the bearish close, he said.

TPL Corp Ltd was the volume leader with 59.67 million shares. It rose by Rs1.12 to Rs24.60 per share. It was followed by Service Fabrics (R) with 35.74 million shares. The stock fell by 66 paisas to Rs4.21 per share.

Stocks that recorded significant turnover included Telecard Limited, WorldCall Telecom, Azgard Nine, Kohinoor Spinning, Ghani Global Holdings, TPL Properties, Yousuf Weaving, and Byco Petroleum.

Turnover in the future contracts dropped to 104.85 million shares from 106.80 million shares traded in the previous session.