Stocks extend losses on bleak economic outlook

Stocks stayed the losing course on Friday given the grim economic outlook as central bank’s hawks gear up for a big tightening to fight inflationary fires in a monetary policy meeting next week, traders said.

Pakistan Stock Exchange's (PSX) benchmark KSE-100 Share Index fell 123.06 points or 0.28 percent to 43,395.78 points, testing a day high of 43,607.51 and a low of 43,051.30 points.

Analyst Ahsan Mehanti at Arif Habib Corp said stocks closed lower on uncertainty over SBP (State Bank of Pakistan) policy next week and falling rupee.

The surge in NSS rates, raise in industrial power tariff, trade deficits, and concerns for higher CPI inflation led to a bearish close, Mehanti said.

KSE-30 Shares Index also dropped 56.45 points or 0.33 percent to end at 16,900.77 points.

Traded shares decreased 21 million to 179.17 million from 200.49 million shares. Trading value fell to Rs6.73 billion from Rs8.75 billion.

Market capital eased to Rs7.454 trillion from Rs7.459 trillion. Out of 324 actives in the session, 123 posted gains, 183 losses, while 18 remained unchanged.

Topline Securities in a note said the Index largely remained in the negative zone during the day.

“This negativity in the market can be attributed to an increase in the National Saving Scheme rates in the range of 161bps to 240bps,” the brokerage said. Major contribution to the index came from NESTLE, TRG, FFC, MEBL, and BAFL, as they cumulatively contributed 75 points to the index, whereas on the flip side SYS, BAHL, DAWH, HBL, and UBL brought the index down by 108 points.

The highest increase was recorded in the shares of Nestle Pakistan, which rose Rs389.99 to Rs5,689.99 per share, followed by Colgate Palm that increased Rs40 to Rs2,470 per share.

Worst decline was noted in the shares of Sapphire Textile, which fell by Rs74.40 to Rs917.60 per share, followed by Gatron Industries, down Rs39.78 to end at Rs490.77 per share.

Arif Habib Ltd in a report said the market continued to remain in the bearish zone due to concerns over the economic outlook, further devaluation of rupee, and hawkish stance in the upcoming monetary policy, resulting in overall dull activity.

In the first session, the market opened on a bleak note and mostly cyclical stocks came under the knife whereas in the second session across-the-board selling was witnessed due to lack of positive triggers, the brokerage added.

“Moving forward, we expect the market to remain volatile and recommend a cautious approach,” said the Arif Habib Ltd report.

Sectors that led the losses were E&P (-37 points), technology & communication (-33 points), commercial banks (-33 points), textile composite (-17 points), and power (-15 points).

TRG Pakistan Ltd was the volume leader with 14.62 million shares, followed by Treet Corp with 14.24 million shares.

Stocks that recorded significant turnover included WorldCall Telecom, Hascol Petrol, TPL Properties, Byco Petroleum, Azgard Nine, Pakistan Petroleum, Telecard Limited and Unity Foods Ltd.

Turnover in the future contracts decreased to 57.16 million shares from 79.07 million shares on Thursday.