Stocks weaken as rupee loses more blood

Stocks sagged on Thursday after rupee’s retreat versus dollar deepened further, clouding the economic outlook, with inflation remaining the top concern for investors as a political crisis simmers in the country, traders said.

Pakistan Stock Exchange's (PSX) benchmark KSE-100 Share Index lost 305.40 points or 0.70 percent to close at 43,032.57 points after testing a high of 43,458.92 and a low 42,961.23 points in day trade.

Arif Habib Ltd said the market traded in range the whole day due to worries over rising inflation and political noise. “The benchmark index that opened with a roar mostly languished the whole day without much activity,” it reported.

Again, last-hour profit-taking dragged the index into the red zone, the brokerage said adding, volumes remained dry in the mainboard stocks. Sectors that did the major damage included power (-142.4 points), fertiliser (-32.0 points), E&P (-28.4 points), banks (-27.6 points), and technology (-25.0 points).

The KSE-30 index shed 191.58 points or 1.16 percent to 16,335.02 points in tandem with the main market.

Traded shares fell by 48 million shares to 208.115 million shares from 256.479 million shares. The trading value decreased to Rs7.783 billion from Rs8.747 billion. Turnover in the futures’ contracts decreased to 183.704 million shares from 195.867 million shares.

Market capital narrowed to Rs7.151 trillion from Rs7.197 trillion.

Out of 343 companies active in the session, 110 closed in the green, 209 in the red and 24 remained unchanged.

Topline Securities said profit-taking, which claimed 377 points during the day trade, was triggered after the lower-than-expected HUBC result, which disappointed investors and led the stock to close at its lower limit.

On the corporate front, PSMC announced its 2Q2022 EPS at Rs5.38. Major decliners in the trading session were ENGRO, MEBL, BAHL, MCB, and MARI cumulatively dented the index by 87 points.

The highest increase was recorded in shares of Sanofi-Aventis, which rose by Rs79.70 to Rs1,349.70 per share, followed by Reliance Cotton, which increased by Rs37.05 to Rs531.05 per share. A significant decline was noted in shares of Sapphire Textile, which fell by Rs64.33 to Rs1,057 per share, followed by Colgate Palm, which decreased by Rs24.97 to Rs2,375 per share.

Ahsan Mehanti, at Arif Habib Corp, said, stocks went down on reports of dismal IMF projections for GDP growth, inflation, and weak FDI data for July 2022.

Investor concerns for political noise, surging circular debt, falling rupee, and new taxes levied ahead of IMF board meet-up weighed on the trade, Mehanti said.

WorldCall Telecom was the highest traded stock with 18.598 million shares. It fell by 3 paisas to Rs1.32 per share. It was followed by Hascol Petrol with 10.506 million shares. The stock closed lower by 8 paisas to Rs6.74 per share.

Other stocks that recorded significant turnover included PIAC (A), Nishat Chunian Power, Telecard Limited, Hub Power Co, Pakistan Refinery, Cnergyico PK, K-Electric Ltd, and Citi Pharma Ltd.

Even the news that the Qatar Investment Authority aims to invest $3 billion in Pakistan failed to boost the investor morale.

The announcement was made by Qatar's Emiri Diwan regarding lending support to the cash-strapped country.

Pakistan is in economic turmoil and faces a balance of payments crisis, with foreign reserves as low as $7.8 billion, which are barely enough for more than a month’s imports.