Stocks ebb as political uncertainty flows

Stocks weakened on Monday in a languid session as emerging political noise mostly left investors noncommittal, despite strong rupee recovery, traders said.

The KSE-100 Share Index, the barometer of the country’s capital market, eased by 151.25 points or 0.33 percent to close the day at 45,612.20 points. During the trade, the index tested a day high of 45,771.28 and a low of 45,385.97 points at Pakistan Stock Exchange (PSX).

Equities went through a volatile session as lack of positive triggers, external woes, political uncertainty and reports of more than 4,000 new Covid cases for third straight day and positivity rate crossing 8.7 percent dented the sentiment-sensitive index.

The market got off to a good start, but as the session progressed, a relentless selling spree reversed the rally. Analyst Ahsan Mehanti at Arif Habib Corp said stocks closed bearish on political uncertainty amid protest against Supplementary Finance Bill.

Uncertainty over the outcome of IMF (International Monetary Fund) board review to release EFF (Extended Fund Facility) tranche and SBP (State Bank of Pakistan) policy note next week weighed the stocks down, Mehanti said.

He, however, added that oil and textile stocks outperformed on surging global crude oil prices and robust exports. Zafar Moti, former director of PSX, said the market disappointed investors on the first day despite rupee’s recovery against dollar. Besides, fund managers had also returned from leaves, he added.

However, Moti said, the market remained lethargic on the first day, which was usually the case on the last session, while volumes also shrank at an alarming level. “There was no bad news, yet the market remained dull…,” he added.

KSE-30 Shares Index also closed down by 56.35 points or 0.31 percent to 17,942.16 points against 17,998.51 points. Traded shares receded by 66 million shares to 173.49 million from 239.97 million, while traded value rose to Rs6.10 billion from Rs6.09 billion. Market capital, however, narrowed to Rs7.822 trillion from Rs7.846 trillion.

Out of 336 actives in the session, 102 posted gains, 218 losses, while 16 remained unchanged. Topline Securities in a note said investor concerns over higher international commodity prices led the market to open sideways.

Initial pressure came from TRG where stock touched its lower limit in the first hour of the session followed by other technology stocks as AVN, OCTOPUS, and SYS that closed lower, the brokerage said.

Sapphire Textile was the best gainer of the day, up Rs55.96 to finish Rs1,050 per share, followed by Mehmood Textile, up Rs44.25 to end at Rs634.29 per share. Nestle Pakistan led the losers by falling Rs114.25 to Rs5,410 per share, trailed by Bata (Pakistan), down Rs70.10 to close at Rs2,099 per share.

JS Research in its market wrap said the PSX witnessed a dull trading session today as investors chose to stay on the sidelines amid rising Covid cases in the country. “Going forward, we recommend investors to avail any downside as an opportunity to buy in technology, fertiliser, oil and gas exploration, and cyclical sector stocks,” the brokerage said.

WorldCall Telecom was the volume leader with 25.49 million shares with TRG Pakistan Ltd emerging as the second most traded stock with 20.07 million. Cnergyico PK, Alfalah Consumer, Telecard Limited, Hascol Petrol, Unity Foods Ltd, Ghani Global Holdings, Octopus Digital, and Silk Bank Ltd were among the well-trade stocks. Turnover in the future contracts slightly decreased to 56.11 million shares from 56.34 million.