Stocks fall on rupee retreat, IMF delay

Stocks fell on Tuesday in thin trade as the IMF programme continues to remain elusive, while fresh rupee depreciation along with weak economic indicators forced investors to err on the side of caution the whole day, traders said.

Pakistan Stock Exchange's (PSX) benchmark KSE-100 Share Index lost 245.62 points or 0.59 percent to 41,102.57 points after swinging between 41,453.06 and 41,067.55 points.

Topline Securities said equities witnessed a lacklustre day owing to concerns over delay in the IMF programme as expressed by the finance minister. “Investors opted to stay sideline resulting in low volumes,” the brokerage said.

Initially, the market opened on a positive note where the index made an intraday high at 41,458 (+110 points; up 0.27 percent); however, profit-taking at the aforementioned level, pushed the benchmark index down.

Banks, fertilisers, and chemical sector stocks contributed negatively to the index where HBL, MCB, FFC, BAHL, & EPCL lost 100 points, cumulatively. On the flip side, DAWH, UBL and SYS witnessed some buying interest as they added 31 points collectively.

KSE-30 index also shed 101.79 points or 0.65 percent to close at 15,635.13 points.

Traded shares, however, dropped by 10 million shares to 76.890 million shares from 86.619 million shares. The trading value decreased to Rs2.398 billion from Rs3.048 billion.

Turnover in the future contracts decreased to 20.052 million shares from 25.308 million shares.

Market capital further narrowed to Rs6.897 trillion from Rs6.947 trillion. Out of 321 companies active in the session, 119 closed in the green, 176 in the red, while 26 remained unchanged.

A post-session report of Arif Habib Ltd said the market observed a negative session as rupee depreciated against the dollar. “Investor’s participation stayed lacklustre over concerns of resumption of IMF program. Volumes remained dry in the main board whereas decent volumes were witnessed in the 3rd tier stocks,” it reported.

Sectors that dented the index included banks (-80.5points), cement (-50.4points), fertilizer (-35.9points), E&Ps (-17.5points), and tobacco (-15.6points).

The highest increase was recorded in shares of Allawasaya Textile, which rose by Rs114.40 to Rs1,639.82 per share, followed by Sanofi-Aventis, which jumped by Rs92.59 to Rs1,327.20 per share. A major decline was noted in shares of Unilever Foods, which fell by Rs1,400 to Rs24,000 per share, followed by Nestle Pakistan, which decreased by Rs140 to Rs5,660 per share.

JS Research said investor sentiment would largely be driven by positive news on the IMF front. “We recommend investors to adopt a buy-on-dip strategy,” the brokerage advised.

Analyst Ahsan Mehanti at Arif Habib Corp said stocks closed bearish on weak earnings outlook amid surging energy prices and speculations on a likely major surge in SBP key policy rate.

Dismal May 2022 auto sales and fall in cement dispatches by 7.91 percent year-on-year for July-June 2022, trade deficit for FY22 surging by 55.29 percent to $48.259 billion year-on-year and falling rupee dragged the index down. Maple Leaf led the volume chart with 6.536 million shares. It closed lower by Rs1.39 to Rs35.44 per share. It was followed by WorldCall Telecom with 4.790 million shares. The company gained 2 paisas to close at Rs1.37 per share.

Other stocks that recorded significantly to the turnover included Fauji Cement, Pakistan Refinery, Lotte Chemical, TPL Properties, Cnergyico PK, Sui North Gas, Engro Polymer, and G3 Technologies.