Stocks lose more blood as rupee takes new stabs

Stocks booked more losses on Thursday as rupee was further dwarfed by the dollar amid anxiety over rising bond yields that might strengthen a case for monetary tightening, traders said.

Pakistan Stock Exchange's (PSX) benchmark KSE-100 Shares Index took a hit of 290.54 points or 0.63 percent to close lower at 45,652.62 points.

Zafar Moti, a former PSX director, said same problems were resurfacing, 46,000-points-level has been broken.

“The dollar has reached Rs187 in the interbank, while in the open bank it may have gone further higher.”

He said rising MTBs (Market Treasury Bills) yields were also a concern and central bank was likely to raise policy rate by 75 to 100 basis points.

“Whether Miftah Ismail, the new finance minister, will be able to successfully handle the IMF situation, is not clear,” he said.

Moti said overall market was utterly directionless and in the doldrums.

JS Research credited Thursday’s downward spell to further weakening of rupee versus dollar and a surge of 70bps in MTBs yields.

Both these developments shook investor confidence seriously, the brokerage said.

The brokerage recommends investors to buy on dips especially in refineries, banking, and oil & gas sectors around 45,500-points-level.

Arif Habib Corp’s Ahsan Mehanti believes a surge in T-bills yields to near 13.85 percent and a retreating rupee depressed the bourse.

Power tariff hike and reports of a rigid IMF stance against fuel subsidies, tax amnesty and its demands for imposing higher tariff and taxes for resumption of bailout package kicked the stocks downstairs, he said.

KSE-30 index also dropped 120.22 points or 0.68 percent to 17,569.94 points.

Traded volume decreased by 48 million shares to 186.43 million from 234.99 million, while value shrank to Rs5.621 billion from Rs8.011 billion.

Turnover in the future contracts fell to 52.77 million shares from 74.04 million shares.

Market capital narrowed to Rs7.618 trillion from Rs7.661 trillion.

Out of total active names, only 92 ended buoyant, 198 closed lower, while 21 maintained status quo.

Analyst Ali Najib at Topline Securities said equities had a directionless day despite a good start.

ENGRO, BAHL, and SYS together lost 120 points, while EFERT, LOTCHEM, and CNERGY added 41 points collectively, Najib said.

Colgate Palmolive, the top gainer of the session, surged Rs35 to Rs2,335 per share, followed by Indus Motor Co, up Rs8.21 to close at Rs1,348.96 per share.

Nestle Pakistan, which fell by Rs99 to Rs5,501 per share, emerged as the worst loser of the day, followed by Mari Petroleum that shed Rs29.47 to end lower at Rs1,701.36 per share.

A report by Arif Habib Ltd said the market remained under pressure due to further devaluation of the rupee against the and concerns over spikes in market treasury bill yields.

According to brokerage report, despite opening in the green zone the index failed to sustain the positive zone owing to profit-taking.

In the last trading hour, refinery sector rallied after PRL’s tremendous financial results beat analyst expectations, the report added.

Lotte Chemical was the volume leader with 19.98 million shares, followed by Cnergyico PK with 19.85 million shares.

Major contribution to trade volume came from Pak Refinery, Hum Network, Ghani Global Holdings, WorldCall Telecom, K-Electric Ltd, Maple Leaf, Telecard Limited, and Agritech Limited.