A seven-session winning streak came to an end at the Pakistan Stock Exchange on Thursday as expansion of trade deficit and mounting Omicron variant cases dragged the benchmark KSE-100 index down by 326 points.
Over twofold widening of trade gap in the first six months of ongoing fiscal year and a jump in imports to unsustainable levels painted a gloomy picture of the economy and shattered investor confidence.
The market now expects further deterioration in the current account deficit and a slide in rupee’s value against the US dollar.
Adding to the woes of market participants, a steep rise in cases of Covid-19 Omicron variant across the country rekindled fears of another lockdown and investors chose to dump their stockholdings. However, massive buying by foreigners capped the losses.
Earlier, the session kicked off with a slide as investors rushed to offload their positions on the back of a dismal trade data. The market took a breather near midday and cherry-picking helped it to recover.
However, it succumbed to the selling pressure again due to concerns over the spike in virus cases and closed the day down.
At close, the benchmark KSE-100 index recorded a decrease of 325.59 points, or 0.72%, to settle at 45,082.30.
A report of Arif Habib Limited stated that the market remained under pressure due to the high trade deficit and rising number of new Covid-19 variant Omicron cases in Pakistan.
The trade deficit widened by a sharp 106% year-on-year to $25.478 billion, which was driven by nearly three-time higher imports compared to exports.
Profit-taking was witnessed throughout the day mainly in technology and cement stocks, which led the market to close in the red.
Activity continued to remain sideways as the market witnessed hefty volumes in third-tier stocks, the report said.
JS Global analyst Neelam Naz said that the market took a break after a seven-day climb and closed at 45,082, losing 326 points day-on-day.
Important news that dampened investor confidence were regarding the rise in international coal prices and widening trade deficit.
Volume leaders of the day were WorldCall Telecom (-4.2%), TRG Pakistan (-7.5%), Unity Foods (R) (-0.9%), Telecard (-3.9%) and Yousaf Weaving Mills (+14.2%).
Shares which mainly dragged the index down were TRG Pakistan, Lucky Cement, PSO, Pakistan Petroleum and Oil and Gas Development Company.
“Going forward, we advise a buy-on-dip strategy in technology, oil and gas exploration, banking and cyclical sector stocks,” the analyst said.
Overall trading volumes fell to 345.3 million shares compared with Wednesday’s tally of 432.1 million. The value of shares traded during the day was Rs13.2 billion.
Shares of 360 companies were traded. At the end of the day, 87 stocks closed higher, 258 declined and 15 remained unchanged.
WorldCall Telecom was the volume leader with 65.1 million shares, losing Rs0.1 to close at Rs2.26. It was followed by TRG Pakistan with 54.8 million shares, losing Rs9.26 to close at Rs114.33 and Unity Foods (R) with 30.2 million shares, losing Rs0.02 to close at Rs2.25.
Foreign institutional investors were net buyers of Rs2.1 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
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