Stocks battered as mutual funds cut exposure

Stocks tumbled on Tuesday as mutual funds remained on an offloading drive, while rupee rout continued to raise red flags on economy, traders said.

Pakistan Stock Exchange's (PSX) benchmark KSE-100 Shares Index lost 379.12 points or 0.80 percent to close at 46,891.34 points. The index tested a high of 47,387.34 points and a low of 46,608.78 points during the session.

Brokerage Arif Habib Ltd in a note said the market tumbled mainly as a result of redemptions at mutual funds’ end.

“On the other hand, negative news triggers on slippage of rupee-dollar parity, US State Secretary’s hinting at revisiting US–Pakistan relations and pending IMF review had bearing on the Index,” it said.

Selling was observed across the board with technology, exploration and production, cement and steel sectors leading the downside, the brokerage said. KSE-30 index also dropped 194.11 points or 1.03 percent to 18,602.86 points.

Ahsan Mehanti, an analyst at Arif Habib Corp, said, stocks fell across the board on concerns over foreign outflows after MSCI downgraded the PSX to frontier market and uncertainty over central bank policy announcement next week. Rupee instability also played kept the sentiment on tight leash, Mehanti added.

Ready market volumes increased 84 million shares to 479.79 million from 395.83 million. Trading value eased to Rs15.04 billion from Rs16.18 billion. Market capital reduced to Rs8.175 trillion from Rs8.276 trillion. Out of 525 actives in the session, 102 advanced, 411 retreated, while 12 remained neutral.

Analyst Haris S Khan at Topline Securities said investors adopted a cautious approach owing to the upcoming monetary policy announcement scheduled for September 20 (Monday), “where market participants are expecting a gradual increase in interest rates”.

The cement sector witnessed selling pressure and lost 1.94 percent on average, Khan said adding tht LUCK, TRG, OGDC, DGKC, and BYCO dragged the index down by 127.75 points.

On the results front, DGKC announced its unconsolidated FY2021 earning per share (EPS) of Rs8.49 accompanied with a cash dividend of Re1.0/share. The stock lost 3.72 percent to close at Rs96.92 for the day.

Allawasaya Textile was the top gainer, jumping Rs108.70 to Rs1,558.09 per share, followed by AKD Hospitality that gained Rs27 to close at Rs387 per share.

Nestle Pakistan took the worst hit of the day, falling Rs244.09 to Rs6,155.01 per share, followed by Bata Pakistan, down Rs92.24 to end at Rs1,701.12 per share.

Stocks that contributed positively to the index included HBL (+36 points), HMB (+22 points), FFC (+9 points), DCR (+6 points) and PKGS (+5 points). The major laggards were LUCK (-44 points), TRG (-24 points), OGDC (-23 points), DGKC (-19 points), and BYCO (-18 points).

Byco Petroleum was the most traded stock of the day with 71.67 million shares. It dropped 71 paisas to Rs9.08 per share. It was followed by Telecard Limited with 51.43 million shares. The stock gained 48 paisas to close at Rs24.36 per share. Byco lost 7.25 percent amid news reports suggesting that the company would not be able to avail the incentives of the Oil Refinery Policy.

Stocks that recorded significant turnover included WorldCall Telecom, Azgard Nine, Hum Network, Service Fab(R), TPL Properties, Yousuf Weaving, TPL Corp Ltd, and K-Electric. Turnover in the futures contracts increased to 156.75 million shares from 106.75 million in the previous session.