Stocks bleed big time as politics come to boil

Stocks tumbled Thursday as investors remained wary of the impacts of ‘audio leaks’ on the political as well as economic stability amid media reports that a US court has cornered a top Pakistani bank in an alleged terror-financing case, traders said.

The KSE-100 Shares Index, the main gauge of the capital market performance, lost 421.27 points or 1.02 percent to 41,013.86 points at the Pakistan Stock Exchange.

The highest index of the day remained at 41,435.13 points while the lowest level of the day was recorded at 40,909.60 points.

In its post-session analysis report, Arif Habib Ltd, a brokerage, said it was bloodbath and held political clamour and the negative news regarding Habib Bank Ltd (HBL) responsible for it.

“As investors opted to remain on the sidelines because of the hazy economic forecast, the market opened in the red and remained under pressure for the rest of the day making an intra-day low of -524.31 points,” it reported.

The volumes declined significantly across the main board on the contrary decent volumes were observed in the 3rd tier stocks. Sectors that drove stocks south included banks (-246.8 points), technology (-53.0 points), E&Ps (-26.8 points), chemicals (-21.7 points), and fertilisers (-17.8 points).

The KSE-30 index also retreated 192.01 points or 1.24 percent to 15,312.25.

Traded shares fell 93 million to 127.449 million from 220.560 million shares. The trading value dropped to Rs5.518 billion from Rs8.028 billion. Market capital narrowed to Rs6.760 trillion from Rs6.813 trillion. As many as 229 posted gains, 94 losses, and 15 nothing.

According to Topline Securities, the market plunged after Bloomberg report that “HBL faces secondary liability in a case in the United States after it failed to shake off claims of aiding and abetting al-Qaeda terrorism and joining in a conspiracy to launch attacks that killed or injured 370 plaintiffs or their family members”.

“The aforesaid development has cut the ongoing rally short,” the brokerage said.

Banks and tech sector stocks including HBL, UBL, TRG, MEBL, and SYS lost 237 points, cumulatively; however, LUCK, NCL, and SHEL witnessed some buying and added 29 points collectively. The highest increase was recorded in the shares of Sanofi-Aventis, which rose by Rs49 to Rs1,149 per share, followed by Faisal Spinning, which increased by Rs23.99 to Rs423.99 per share.

Premium Textile led the laggards by losing Rs62.02 to Rs764.93 per share, followed by Colgate PalmXDXB, which fell Rs48.99 to Rs2,091.01 per share.

Analyst Ahsan Mehanti at Arif Habib Corp said concerns over the economic impact of flood losses and Pakistan dollar bonds’ yields surging to near to default after incoming finance minister Ishaq Dar hinted at cutting interest rates led to a bearish close.

K-Electric Ltd was the highest traded stock with 11.169 million shares. It dropped by 5 paisas to Rs3.00 per share.

Second to the power utility in terms of traded shares was TPL Properties that posted a turnover of 9.977 million shares. It closed lower by 61 paisas to Rs20.86 per share.

Other major traded stocks were TRG Pakistan Ltd, Nishat (Chunian), Fauji Cement, Flying Cement, Cnergyico PK, Unity Foods Ltd, Pak Refinery and Sui North Gas.

Turnover in the future contracts decreased to 152.828 million shares from 203.003 million shares. JS Research recommended investors to stay cautious and wait for clarity in market sentiment before availing the downside as a buying opportunity.